1. A firm is expected to pay a dividend of $2.65 next year and $2.80 the following year. Financial analysts believe the stock will be at their price target of $45 in two years.
Compute the value of this stock with a required return of 12.6 percent.
Value of stock=
2. Financial analysts forecast Limited Brands (LTD) growth rate for the future to be 9.5 percent. LTD’s recent dividend was $0.50.
What is the value of Limited Brands stock when the required return is 11.5 percent?
Value of stock=