Today’s date is March 30, 2012. E-Pay, Inc., stock pays a dividend every year on March 29. The most recent dividend was $1.50 per share. You expect the company’s dividends to increase at a rate of 25 % per year through March 29, 2015. After that, you expect that dividends will increase at 5 % per year. Investors require a 14 % return on E-Pay stock. Calculate the price of the stock on the following dates: March 30, 2012; March 30, 2016; and September 30, 2013.
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