Question: hello I have question/answer. I need step by step explanation please. Dont understand! Company ADF has been paying a dividend of $1.25 per quarter for

hello I have question/answer.

I need step by step explanation please. Dont understand!

Company ADF has been paying a dividend of $1.25 per quarter for several years. Its management plans to continue with this dividend for two more quarters and then to start increasing its dividend by 1% per quarter, with the first increase in the third quarter of this year. The planned increase in dividends will be announced today. If ADF stock currently requires a return of 18% effective per year, how much should its stock price increase when the company makes the announcement

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