Question: A company currently does not pay a dividend. Most analysts believe it must change this policy within the next 10 years, however. Shareholders will soon

A company currently does not pay a dividend. Most analysts believe

A company currently does not pay a dividend. Most analysts believe it must change this policy within the next 10 years, however. Shareholders will soon start demanding cash be returned to them via the start of dividends. Say those dividends start with a $4.50 annual dividend at the end Year 6. It appears as though continuing good financial performance will allow the company to grow that dividend at about 3.0% each year. Shareholders in the firm have an opportunity cost of 12.0%. What is the price of this stock expected to be (a) as or the end of Year 5 and (b) right now

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