Fey Fashions expects the following dividend pattern over the next seven years.
year 1 year 2 year 3 year 4 year 5 year 6 year 7
$1.20 $1.33 $1.46 $1.64 $1.82 $2.02 $2.24
The company will then have a constant dividend of $2.50 forever. What is the stock's price today if an investor wants to earn:
a. 16%
b. 20%