What will the stock price be in three years

Reference no: EM132208086

Question - The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.45 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year indefinitely. Investors require a return of 11 percent on the company's stock.

a. What is the current stock price?

b. What will the stock price be in three years?

c. Suppose instead that the growth rate of dividend is 6% the first year and 5% thereafter. What will be the current stock price?

Reference no: EM132208086

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