PepsiCo (NYSE:PEP) paid a dividend of $0.58 per share this year. Dividends at the end of each of the next five years are expected to be as follows: After year 5, the dividends are expected to grow indefinitely at 10 percent a year. If your required rate of return for PepsiCo common stock is 12 percent, what is the most that you would pay for PepsiCo today?
Year 1- 0.7 Year 2 - 0.83 Year 3 - 0.96 Year 4 - 1.09 Year 5 - 1.22