$35.50 per share is the current price for Foster Farms' stock. The dividend is projected to increase at 10 % per year for the next 3 years.  After three years it is expected to grow at 4% indefinitely. Foster paid a dividend of $2.50 yesterday. X's return generally responds to market changes twice as much as does the average stock. Treasury bills currently yield 8%. The market is yielding 11%.

What should X sell for today?  

What should it sell for in 3 years?

Answer rating: 100% (QA)

To calculate the current price of Foster Farms stock we can use the dividend discount model DDM as f... View the full answer