Question: The Madisons are considering purchasing LAC stock based on a stock tip from their friend, John. John has provided them with the following information:

The Madisons are considering purchasing LAC stock based on a stock tip

The Madisons are considering purchasing LAC stock based on a stock tip from their friend, John. John has provided them with the following information: Current dividend: $2.50 Expected dividend growth rate for years 1 and 2: 8% Expected dividend growth rate for years 3+: 10% Based on the information provided, what is the intrinsic value of LAC stock if the Madisons have a required rate of return for this investment of 14%?

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