Fey Fashions expects the following dividend pattern over the next seven year. The company will then have a constant dividend of $2.10 forever. What is thestock's price today if an investor wants to earn
a. 16%?
b. 23%?
Year 1 Year 2 Year 3 Year
4 Year 5 Year 6 Year 7
1.00 1.11 1.23 1.37
1.52 1.69 1.88
What is the stock's price today if an investor wants to earn 16%?
What is the stock's price today if an investor wants to earn 23%?
a)
At 16% rate,
b)
At 23% rate,
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