The current dividend of the common stock of Xerox is $2.5. The market-required rate of return is 18%. The dividends of the common stocks are expected to grow at a rate of 8%, 7%, and 9% for the next three years. The firm also expects that the dividend will remain constant at 5% after the fourth year. What should be the price of the stock today? If the market price is $60, as an investor will you buy the stock? Why?

The current dividend of the common stock of Xerox is $2.5. The market-required rate of return is 18%. The dividends of the common stocks are expected to grow at a rate of 8%,7%, and 9% for the next three years. The firm also expects that the dividend will remain constant at 5% after the fourth year. What should be the price of the stock today? If the market price is $60, as an investor will you buy the stock? Why