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  1. business
  2. accounting
  3. a stock is expected to pay a year-end dividend of

A stock is expected to pay a year-end dividend of $2.5, i.e., D1 = $2.5....

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Accounting

A stock is expected to pay a year-end dividend of $2.5, i.e., D1 = $2.5. The dividend is expected to decline at a rate of 4.5% a year forever (g = -4.5%). If the company is in equilibrium and its expected and required rate of return is 7%, what is the expected price 3 years later? (if your price is $12.34, just enter "12.34".)

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