Stock Values the JacksonTimberlake Wardrobe Co. just paid a dividend of $1.60 per share on its stock.

Question:

Stock Values 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 percent per year indefinitely. If investors require a 12 percent return on The Jackson— Timberlake Wardrobe Co. stock, what is the current price? What will the price be in three years? In 15 years?

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...