On january 1 2014 international copy machines icom one of


On January 1, 2014, International Copy Machines (ICOM), one of the favourites of the stock market, was priced at $300 per share. This price was based on an expected dividend at the end of the year of $3 per share and an expected annual growth rate in dividends of 20 per cent into the future. By January 2015, economic indicators have turned down, and investors have revised their estimate for future dividend growth of  ICOM downward to 15 per cent.

Required: What should be the price of the firm's common stock in January 2015?

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Finance Basics: On january 1 2014 international copy machines icom one of
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