Problem 7-11 Stock Values (LO2) Integrated Potato Chips paid a $1 per share dividend yesterday. You expect the dividend to grow steadily at a rate of 4% per year.
a. What is the expected dividend in each of the next 3 years? (Round your answers to the nearest cent.)
b. If the discount rate for the stock is 12%, at what price will the stock sell? (Do not round intermediate calculations. Round your answer to the nearest dollar.)
c. What is the expected stock price 3 years from now? (Round your intermediate calculations to 4 decimal places. Round your final answer to the nearest cent.)
d-1. If you buy the stock and plan to hold it for 3 years, what payments will you receive? (Do not round intermediate calculations. Round your answers to the nearest cent.)
What is the present value of those payments? (Do not round intermediate calculations. Round your answer to the nearest dollar.)