Amount | growth rate | |
D0 | 5.25000 | |
D1 | 5.35500 | 2% |
D2 | 5.46210 | 2% |
D3 | 5.57134 | 2% |
D4 | 6.50000 |
Now P3 = D4/r = 6.5/0.12 = 54.16667
Thus worth of the stock today = present value of D1 to D3 and present value of P3
= 5.355/1.12 + 5.46210/1.12^2 + 5.57134/1.12^3 + 54.1667/1.12^3
= OMR 51.66
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