What is the most you would pay for a share of lbi stock

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Legal Beagle, Inc. (LBI) paid a 2012 dividend of $1.30 and a 2013 dividend of $1.35. These dividends are consistent with their historical growth rate in dividends. Because of some uncertainty with the tax laws on capital gains versus dividends, they do not anticipate paying any dividends for the next few years. However, beginning in March 2018, they expect to pay a dividend of $1.50 with dividends thereafter changing at the historical growth rate. If the discount rate for LBI is 8.50%, what is the most you would pay for a share of LBI stock?

Reference no: EM13486642

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