An attorney from Indianapolis has recently contacted you for help in determining the value of one of his client’s portfolios of securities. The client has the following in her stock portfolio:
a) 1000 shares of Crean, Inc. common stock. Crean just paid a dividend of $1.25. The required return on the stock is 10%. The dividends for the stock are expected to grow at the following rates: years 1-2: 20% years 3-5: 8% years 6+: 4%
Based on your knowledge of how to value securities, what is the value?