D1=(3.24*1.2)=3.888
D2=(3.888*1.2)=4.6656
D3=(4.6656*1.2)=5.59872
Value after year 3=(D3*Growth rate)/(Required rate-Growth rate)
=(5.59872*1.05)/(0.11-0.05)
=97.9776
Hence current price=Future dividend and value*Present value of discounting factor(rate%,time period)
=3.888/1.11+4.6656/1.11^2+5.59872/1.11^3+97.9776/1.11^3
=$83.02(Approx).
15. Differential Growth Fuji Co. is growing quickly. Dividends are expected to grow at a rate...
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