The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.34 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely.
a. If investors require a 10 percent return on The Jackson-Timberlake Wardrobe Co. stock, what is the current price?
b. What will the price be in 10 years?