Return to questlor

Problem $7\mathrm{.}8$ Dividend Discount Model $($LO$2)$

Rework Table $7\mathrm{.}4$ for horizon years $1,2,3,$ and $10,$ assuming that investors expect the dividenc and the stock price to increase at only $6\%$ a year and that each investor requires the same $12$ expected return. The company will pay a dividend of $$1\mathrm{.}20$ at the end of the first year.

What value would an investor place on the stock?

Note: Do not round intermediate calculations. Round your answers to $2$ decimal places.

Answer is complete but not entirely correct.

$\backslash$table$[[\backslash$table$[[$Horizon$],[($years$)]],\backslash$table$[[$PV$],[($Dividends$)]],\backslash$table$[[$PV$],[($Terminal$],[$Price$)]],\backslash$table$[[$Value per$],[$Share$]]],[1,1\mathrm{.}070,$$$18\mathrm{.}930,20\mathrm{.}00],[2,2\mathrm{.}20x,17\mathrm{.}91vv,20\mathrm{.}11],[3,3\mathrm{.}14x,16\mathrm{.}950,20\mathrm{.}09],[10,8\mathrm{.}12,11\mathrm{.}530,19\mathrm{.}65x$