In the previous problem, suppose the dividends per share over the same period were $1.00, $1.08, $1.17,

Question:

In the previous problem, suppose the dividends per share over the same period were $1.00, $1.08, $1.17, $1.25, $1.35, and $1.40, respectively. Compute the expected share price at the end of 2008 using the perpetual growth method. Assume the market risk premium is 8.5 percent, Treasury bills yield 5 percent, and the projected beta of the firm is .90.