Consensus forecast of financial analysts is dividend

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Reference no: EM131045054

A company just paid a dividend of $1.10 per share. The consensus forecast of financial analysts is a dividend of $1.60 per share next year, $2.50 per share two years from now, and $2.50 per share in three years. You expect the price of the stock to be $25 in two years. If the required rate of return is 8% per year, what would be a fair price for this stock today? Please show step by step how I come to this answer.

Reference no: EM131045054

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