Answer:
The current share price will be "$106.70".
Step-by-step explanation:
Given over the stock of Johnson Inc,
Expected dividends averaging 4 years,
D1 = $7
D2 = $13
D3 = $18
D4 = $3.25
Rate of growing, g = 5%
Return required, rs = 8.4%
Thus, stock value for year four using just a constant dividend growth framework has been:
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on putting the values in the above formula, we get
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The current share price would seem to be a total amount of PV of future dividends as well as a discount of P4 at rs:
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On putting values, we get
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