Question

Please show all work and include:  i) timeline, ii) equation set up, iii) answer visibly circled or highlighted. The answer is listed so the work is most important.

Ex 4) The CI Corp. has just paid a cash dividend of $2 per share. If investors require 16% return from investments such as this and the dividend is expected to grow at a steady 8% per year, what is the current value of the stock? What will the stock be worth in 5 years, given the same assumptions about the required return and the dividends? Answer: $27; $39.67

Answer 1

Use below for detailed equation :

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