Non constant Dividends Spears, Inc., has an odd dividend policy. The company has just paid a dividend

Question:

Non constant Dividends Spears, Inc., has an odd dividend policy. The company has just paid a dividend of Si per share and has announced that it will increase the dividend by $4 per share for each of the next four years, and then never pay another dividend. If you require an 11 percent return on the company’s stock, how much will you pay for a share today?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...