The Starr Co. just paid a dividend of $1.34 per share on its stock. The dividend

Question

The Starr Co. just paid a dividend of $1.34 per share on its stock. The dividends are expected to grow at a constant rate of 7 percent per year, indefinitely. If investors require a 13 percent return on the stock, the current price is $ . The price will be $ in 15 years. (Do not include the dollar signs ($). Round your answers to 2 decimal places. (e.g., 32.16))

The Starr Co. just paid a dividend of $1.34 per share on its stock. The dividends are expected to grow at a constant rate of 7 percent per year, indefinitely. If investors require a 13 percent return on the stock, the current price is $ . The price will be $ in 15 years. (Do not include the dollar signs ($). Round your answers to 2 decimal places. (e.g., 32.16))

Explanation / Answer

The Starr Co. just paid a dividend of $1.34 per share on its stock. The dividends are expected to grow at a constant rate of 7 percent per year, indefinitely. If investors require a 13 percent return on the stock, the current price is $ 23.90 . The price will be $ 65.93 in 15 years.

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