The Brennan Co. just paid a dividend of $2.50 per share on its stock. The dividends are expected to grow at a constant rate of 7% per year indefinitely. Brennan Co. investors require a 12% return on their stock.
a. What is the current price of a share of Brennan Co. Stock?
b. What will be the price of a share in of Brennan Co. Stock in 5 years?
c. What will be the price of a share of Brennan Co. Stock in 20 years?