Answer:
(i) $76.63(Approx)
(ii) $99.80 (Approx) ; $135.81 (Approx)
Explanation:
Current price = Dividend for next period ÷ (Required return - Growth rate)
= (3.3 × 1.045) ÷ (0.09 - 0.045)
= $76.63(Approx)
Price in 6 years:
[tex]=Current\ price\times(1+Growth\ rate)^{n}[/tex]
[tex]=76.63\times(1+0.045)^{6}[/tex]
[tex]=76.63\times(1.045)^{6}[/tex]
= $99.80 (Approx)
Price in 13 years:
[tex]=Current\ price\times(1+Growth\ rate)^{n}[/tex]
[tex]=76.63\times(1+0.045)^{13}[/tex]
[tex]=76.63\times(1.045)^{13}[/tex]
= $135.81 (Approx)