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Suppose a stock will pay $10 per share dividend in one year's time. The dividend...

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Finance

Suppose a stock will pay $10 per share dividend in one year's time. The dividend is projected to grow at 8% the following year, and then 4% per year indefinitely after that. To clarify, dividend at beginning of year 1 (that is, one year from today) is: $10 Beginning of year 2 (2 years from today) is: $10 * 1.08 Beginning of year 3 (3 years from today) is: $10 * 1.08 * 1.04 and a 4% rate of growth every year after that. The required return is 9%. What is the stock's price today?

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