Question
Fey Fashions expects the following dividend pattern over the next seven years: Year 1 -- $1.00...
Fey Fashions expects the following dividend pattern over the next seven years:
Year 1 -- $1.00
Year 2 -- $1.10
Year 3 -- $1.21
Year 4 -- $1.33
Year 5 -- $1.46
Year 6 -- $1.61
Year 7 -- $1.77
The company will then have a constant dividend of $2.00 forever. What is the stock's price today if an investor wants to earn..
a. 15%?
b. 20%?
Please show work! round answer to nearest cent.
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