Question
Suppose the stock price of Company A is $Q t. The expected dividend for the next three years is $5, $11, and $22 per share.
Suppose the stock price of Company A is $Qt. The expected dividend for the next three years is $5, $11, and $22 per share. The expected price of the stock in the fourth year is $200. The nominal rate of interest is i1t and is constant for the next 3 years. Suppose another company, Company B, with the current stock price twice that of Company A, has the expected dividend of $14, $20, and $40 per share and expected price of the stock in the fourth year is $400. The equity premium is 50% per year of the nominal interest rate for holding the share for another 2 years.
Calculate the current stock price of Company A ($Qt).
$Qt=? (round answer to two decimal places)
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