A late penalty of 10% will apply to new answers. Intro A stock just paid an annual dividend of $2.1. The dividend is expected to grow by 9% per year for the next 4 years. The growth rate of dividends will then fall steadily by 1.5% per year from 9% in year 4 to 3% in year 8 and stay at that level forever The required rate of return is 12%.
Part 1 What is the expected dividend in 8 years?
Part 2 What is the value of the stock in 8 years?
Part 3 What is the value of the stock now?
