Taftuf Airlines paid the following dividends from 2014 to 2018:

2014 2015 2016 2017 2018

$2.00 $2.01 $2.15 $2.10 $2.25

The airline is expected to pay the average dividend growth expressed above forever. If investor require 12 percent rate of return on the airline, what is the fair market value of its stock in 2019?

7) Denver Inc. has an 11.5% required rate of return. It does not expect to initiate dividends for 15 years, at which time it will pay $3.75 per share in dividends. At that time, Denver expects its dividends to grow at 6% forever. What is an estimate of Denver's price in 15 years (P15) if its dividend at the end of year 15 is $3.75? What is its price in today's dollars if you desire a rate of return of 12%?