Bayou Okra Farms just paid a dividend of $3.10 on its stock. The growth rate in dividends is expected to be a constant 6 percent per year indefinitely. Investors require a return of 13 percent for the first three years, a return of 11 percent for the next three years, and a return of 9 percent thereafter. What is the current share price?
Current share price = D1/(1+r1) + D2/(1+r1)^2+ D3/(1+r1)^3 + D4/((1+r1)^3 *(1+r2))+ D5/((1+r1)^3 *(1+r2)^2)+... View the full answer