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Problem 8-1 Stock Values [LO1]
The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.60 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year indefinitely. Investors require a return of 10 percent on the company's stock. a. What is the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b. What will the stock price be in 3 years? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.) c. What will the stock price be in 12 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer is not complete.
a.Current price $ 42.40
b.Stock price in 3 years
c.Stock price in 12 years