Comparing the life of a company president or ceo with a dishwasher or taxi driver shows us glaring examples of ______.
1 answer:
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Answer:
a)
$34.4
b)
$37.20
c) $59.57
Explanation:
Given:
Dividend paid = $2.15
Growth rate = 4% = 0.04
Required return = 10.5% = 0.105
Now,
a) Present value =
for the current price n = 1
thus,
Current price =
=
= $34.4
b) Price in 3 years
i.e n = 3
=
=
=
$37.20
c) Price in 15 years
i.e n = 15
=
=
= $59.57