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  3. a stock expects to pay a dividend of $3.72 per sha

A stock expects to pay a dividend of $3.72 per share next year. The dividend is...

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Advance Math

A stock expects to pay a dividend of $3.72 per share next year.The dividend is expected to grow at 25 percent per year for threeyears followed by a constant dividend growth rate of 4 percent peryear in perpetuity. What is the expected stock price per share 5years from today, if the required return is 12 percent?

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What is the expected stock price per share 5 years from today, if the required return is 12 percent?
P5=D6/(r-g)=3.72*1.25^3*1.04*1.04/(12%-4%)=98.23125
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