A firm has just paid out an annual dividend of $1

Business Dec 03, 2021

A firm has just paid out an annual dividend of $1.70. Dividends are predicted to grow by $0.15 per year over the next 5 years. After then, the firm’s dividends are expected to grow 6% per year. If the equity cost of capital is 8% per year, what price does the dividend-discount model predict the firm’s stock should sell for today?