An analyst is trying to use a dividend pricing model to


An analyst is trying to use a dividend pricing model to evaluate Bank of America (BOA). After careful analysis, she projects BOA will pay the following dividends over the next three years: YEAR 1 2 3 Dividend $1.00 $1.25 $1.40 After year 3, the analyst assumes a conservative growth rate of 4.00% per year for dividends.

Based on the risk of BOA, she wants an 18.00% return on the stock. What price is BOA worth today?

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Financial Management: An analyst is trying to use a dividend pricing model to
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