Vanderlay Industries paid a dividend this year of $1.76. The company recently announced a new development that will increase profits and dividends. The planned dividend next year is $2.2 and $3.2 the following year, thereafter dividends will increase by a constant rate of 2.1% p.a. indefinitely. If the required rate of return for Vanderlay Industries is 14.7%, what is a fair price for one share today?

Answer rating: 100% (QA)

First we need to understand that the fair price of a stock today also known as present value PV of V... View the full answer