Problem:
Anton, Inc., just paid a dividend of $3.05 per share on its stock. The dividends are expected to grow at a constant rate of 5.5 percent per year, indefinitely. Assume investors require a return of 10 percent on this stock.
Required:
Question 1: What is the current price?
Question 2: What will the price be in five years?
Question 3: What will the price be in fourteen years?
Note: Provide support for your rationale.