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What comes closest to the value today of a stock that just paid a dividend of $1.50 and expects to grow that dividend by 7.00%
What comes closest to the value today of a stock that just paid a dividend of $1.50 and expects to grow that dividend by 7.00% per year in year 1 and year 2, and then grow but will then see the growth in dividends fall to 1.50% in the third year and will continue to grow at that lower rate each year thereafter forever. Using a required rate of return of 3.25%, provide an estimate of the price of the stock
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