Problem:
Berkeley, Inc. just paid an annual dividend of $2.60 per share on its stock. The dividends are expected to grow at a constant rate of 4.5 percent per year, indefinitely.
Required:
If investors require an 11 percent return on this stock, what will the price be in 12 years?
- 66.46
- 67.84
- 69.16
- 70.89
- 74.08
Note: Show all workings.