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What is the price of the stock at the end of year

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Stewart Industries just paid a $1.50 per share dividend on its common stock yesterday. The dividend is expected to grow 10 percent a year for the next five years, after which time the dividend is expected to grow at a constant rate of 5 percent a year forever. The required rate of return on the stock is 14%

a. What is the price of the stock at the end of year?

b. What should be the stock price today?

c. If the stock is selling for $27.82 per share, should you buy or not buy it, why?

Reference no: EM132825849

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