a)
Year 1 dividend = 1.75 (1 + 4%) = 1.82
Current price = D1 / required rate - growth rate
Current price = 1.82 / 0.11 - 0.04
Current price = 1.82 / 0.07
Current price = $26.00
b)
Price in 3 years = Current price (1 + g)n
Price in 3 years = 26 (1 + 0.04)3
Price in 3 years = 26 * 1.124864
Price in 3 years = $29.25
c)
Price in 11 years = Current price (1 + g)n
Price in 11 years = 26 (1 + 0.04)18
Price in 11 years = 26 * 2.025817
Price in 11 years = $52.67
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