Question: Please solve this WITHOUT PVIF, we haven't learned that yet 6. Lerner, Ltd. just paid a dividend of $2.30 on a common share of its'

Please solve this WITHOUT PVIF, we haven't learned that yet 6.

Please solve this WITHOUT PVIF, we haven't learned that yet

6. Lerner, Ltd. just paid a dividend of $2.30 on a common share of its' stock. This dividend is expected to increase by 9% for the next two annual dividend payments. The dividend will then grow at a constant growth rate of 5.5% indefinitely. The investor's required rate of return on the shares is 13% annually. Find the price an investor would be willing to pay for this common share today. (Hint: Draw a diagram of the cash flows involved (DO,D1, D2,D3, etc.) and find the present value of the cash flows.) (8 points)

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