How much should each of coffeemania stock shares sell, Finance Basics

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How much should each of coffeemania stock shares sell

Problem

"Coffeemania", a coffee chain (it's real!), has stock shares traded on stock exchange. You would like to check if they are being traded at the right price. The company is planning to pay the following dividends for each share: $4 in 1 year, $5 in 2 years, $7 in 3 years. After that, the dividends are expected to grow at 4% per year, indefinitely. The annual rate of return for this company is 10%.

How much should each of Coffeemania' stock shares sell for in today's market?

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Finance Basics: How much should each of coffeemania stock shares sell

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