Company BW will pay dividends of $1.05, $1.18, and $1.56 over next three years (dividend will be paid at the end of each year).
You are expecting the stock price to be $57.57 right after the company pays the 3rd dividend.
In the following three years, the annual expected return on the market is 6.88%, annual T-bill rate is 0.58%.
Data suggest that company BW's beta is 1.78 and you are expecting the beta to remain the same in the following three years. What is the maximum price you are willing to pay for this stock today?
PLEASE SHOW STEPS IN EXCEL.