Question: Integrated Potato Chips paid a $1 share dividend yesterday. You expect the dividend to grow steadily at a rate of 4 percent a year.
A. What is the expected dividend in cash of the next 3 years.
B. If the discount rate for the stock is 12 percent, at what price will the stock sell?
C. What is the expect stock price 3 years from now?
D. If you buy the stock and plan to hold it for 3 years, what payments will you received? What is the present value of those payments?