ABC Co. has just paid a $1.50 dividend and expects the dividends to grow at a rate of 4% forever. The expected annual return is 7%.

ABC Co. has just paid a $1.50 dividend and expects the dividends to grow at a rate of 4% forever. The expected annual return is 7%. Remember, paid dividends are already incorporated in the current price

  1. What is the price of the stock today? (2 marks)
  2. What will the price be in 5 years? (2 marks)

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