The Miller Milk Company has just come up with a new lactose-free dessert product for people who

Question:

The Miller Milk Company has just come up with a new lactose-free dessert product for people who can’t eat or drink ordinary dairy products. Management expects the new product to fuel sales growth at 30% for about two years. After that competitors will copy the idea and produce similar products, and growth will return to about 3%, which is normal for the dairy industry in the area. Miller recently paid an annual dividend of $2.60, which will grow with the company. The return on stocks similar to Miller’s is typically around 10%. What is the most you would pay for a share of Miller?

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... 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...