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The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.60 per share on its stock. The...

The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.60 per share on its stock. The dividends are expected to grow at a constant rate of 6% per year indefinitely.

(a)   If investors require a 12 percent return on its stock, what is the current price?
(b) What will the price be in 15 years (at the same rate of return as above)?

Please show steps for how to solve in Excel

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Answer #1

Price of a share is equal to the present value of all future dividends.

Dividend already paid is not relevant since not received. Dividends to be received are relevant

Formulae are:

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