It's 2021, and IBM has just paid its 2020 dividend. Using the table, you want to estimate IBM's current stock price. Assuming historical dividend growth is a reasonable proxy for the future, you estimate that IBM will continue to grow its dividends, forever, at the same rate it has demonstrated over the past 3 years. If the required rate of return on this stock is 10 percent, what is the current stock price?

 

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Year 2018 2019 2020 Dividend Amount $4.00 $4.20 $4.41 Year 2018 2019 2020 Dividend Amount $4.00 $4.20 $4.41

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