Saks is expected to pay a dividend in year 1 of $1.80, a dividend in year 2 of $2.12, and a dividend in year 3 of $2.69. after year 3, dividends are expected to grow at the rate of 8% per year. an appropriate required return for the stock is 11%."
what should the stock price be worth after three years?

$96.84

Explanation:

The computation of the stock price after three years are shown below:

= (Third-year dividend × growth rate) ÷ (Required rate of return - growth rate)

= ($2.69 × 1.08)  ÷ (11% - 8%)

= ($2.9052) ÷ (3%)

= $96.84

The growth rate equal to

= 1 + growth rate

= 1 + 8%

= 1.08

We simply apply the growth model so that the after three years stock price can be correctly computed

client registration system, resource management system, clinical management system, patient information database, common use-system interface

explanation: