Answer:
share price at 5 year is $45.19
Explanation:
given data
annual dividend D1 = $2.86
paid a dividend Do = $2.75
discount rate K = 11.7 percent
to find out
share price of common stock be worth five years
solution
first we get here growth rate that is express as
growth rate = ..................1
put here value we get
growth rate =
growth rate = 4%
so here dividend at 6 year will be
Dn = Do × .............2
D6 = 2.75 ×
D6 = $3.48
so share price at five year will be
P5 = .................3
P5 =
P5 = $45.19
so share price at 5 year is $45.19