Problem:
Patience, Inc., just paid a dividend of $2.35 per share on its stock. The dividends are expected to grow at a constant rate of 4.5 percent per year, indefinitely. Assume investors require an 11 percent return on this stock.
Required:
Question 1: What is the current price?
Question 2: What will the price be in three years and in fifteen years?
Note: Show supporting computations in good form.