Question: Need some help A stock is expected to pay its first $1.5 dividend in 2 years from now ( t=2). The dividend is expected to

Need some help

A stock is expected to pay its first $1.5 dividend in 2 years from now ( t=2). The dividend is expected to be paid annually forever and grow by 1% pa (note negative sign). The discount rate is 7% pa. Estimate what the stock price will be in 3.25 years from now. The stock price at time 3.25 is expected to be: Select one: a. $18.5159 b. $18.6904 c. $1875 d. $18.8791 e. $199987 The correct answer is 518.6904

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