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No Hurdle Inc.’s most recent annual dividend payment (2012) was $1.50 per share. It is estimated...

No Hurdle Inc.’s most recent annual dividend payment (2012) was $1.50 per share. It is estimated that these dividends will increase at a rate of 10% annually over the next 3 years (for 2013, 2014 and 2015), after which the growth rate will settle to 5% per annum for an indefinite future. If investors require a 15% return on stock, what will be the stock price in 2015?

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Dividend Present value Year pv @ 15% $1.65 $1.43 2013 0.8696 $1.82 $1.37 2014 0.7561 $2.00 $1.31 2015 0.6575 $20.96 (2.00*1.0

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