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Tesla expected to pay a dividend of $0.80 per share. The dividend is expected to increase by 6% the following yerar; 5% the third year and 4% the 4th year. The dividend is expected to be constant forever after year 4 at its year 4 level. Investors expect a return of 13% per year on the stock.
1. What is the market price per share of it?
2. What will the price of the share be at the end of 1 year from today after the 0.80 dividend?
3. What rate of return will shareholders earn over year 1? r= (Change in price+ Dividend)/Initial price
Please show full work.
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