Share Price Financials

Corn Inc. has just paid a dividend of 6$ per share and has announced that it will increase the dividend by $2 per share for each of the next four years, and then never pay another dividend. If you require an 11% return on the company's stock how much will you pay for a share today?

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...he year of the calculation.

In year 5, the dividend growth rate stabilizes to 0 %. Thus, the answer simplifies to a perpetuity. The PV for a perpetuity is ...