In: Finance
Fey Fashions expects the following dividend pattern over the next seven years:
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Year 6 |
Year 7 |
|
$1.00 |
$1.10 |
$1.21 |
$1.33 |
$1.46 |
$1.61 |
$1.77 |
The company will then have a constant dividend of $2.00 forever. What is the stock's price today if an investor wants to earn
a. 17%? $_______ (Round to the nearest cent.)
b. 22%? $_______ (Round to the nearest cent.)
we have to calculate here present value of all dividends and present value of P7. so we will get P0