Answer:
intrinsic value: 49.50
value in four years: Â Â Â Â $ Â 61.32
value in fourteen years: $ 104.75
Explanation:
we solve using the gordon model:
[tex]\frac{divends_1}{return-growth} = Intrinsic \: Value[/tex]
D0 = Â 3.05
D1 = 3.05 x ( 1 + 0.055) = 3.21775‬
[tex]\frac{3.21775}{0.12 - 0.055} = Intrinsic \: Value[/tex]
Value: 49.50384615
In the future will grow at the same rate as dividends:
price in four years: Â Â Â Â 49.50 x (1.055)^4 Â = Â 61.32182021
price in fourteen years: 49.50 x (1.055)^14 = 104.7465274