Question: 18) Alpine Software Inc. has just introduced a new operating system into the market, which competes with Windows 98. This morning Alpine paid a $2
18) Alpine Software Inc. has just introduced a new operating system into the market, which competes with Windows 98. This morning Alpine paid a \$2 annual dividend per share to its stockholders, Expecting increased profitability (due to the new software), an investor believes that dividends will grow at a rate of 5% per year during the next two years. After that, the investor believes that the dividend growth rate will stabilize at a constant rate (g) forever. The investor is willing to buy Alpine Software's stock at a price of $15.3879 per share, but hold it only for two years. The appropriate rate of return on the stock is 16% p.a. (a) What price does the investor expect to get for the stock in two years
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