Answer:
The current price of the stock is $126.55
Explanation:
The current price per share can be calculated using the dividends discount model where by future dividends are discounted back to the present value to calculate the price of a stock. The formula that will be used for this stock is as follows,
P0 = D1 / (1+r) + D2 / (1+r)^2 + D3 / (1+r)^3 + D4 / (1+r)^4 +
[ (D4 * (1+g) / (r - g)) / (1+r)^4 ]
P0 = 6.9 / (1+0.1) + 17.9 / (1+0.1)^2 + 22.9 / (1+0.1)^3 + 4.7 / (1+0.1)^4 +
[ (4.7 * (1+0.06) / (0.1 - 0.06)) / (1+0.1)^4 ]
P0 = $126.55
