Mason holdings is expected to pay dividends of $.20 every quarter for the next three years. if the current price of mason stock is $22.60, and mason's equity cost of capital is 18%, what price would you expect mason's stock to sell for at the end of three years?

Price of the stock at the end of three years =$34,27

Explanation:

Price of the stock today = .

Where D1 is the total dividend earned in year 1 =$0.2*4=$0.8

D1=D2=D3=$0.8

therefore, from the given information

.

Solve for P3, which is the price of the stock at the end of three years =$34,27.

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-lavira : )

i'ts proportional. if the inflation rate is 12% for example, the cpi will be 12% less.

hope it ,

bioteacher101