You are considering investing in ICI. Suppose ICI currently paid $3 dividend and enjoying super growth and expected to pay 30% more in dividends each year for 3 years. After these three years the dividend growth rate is expected to be 2% per year forever. If the required return for ICI common stock is 11%, what is a share worth today?

$67.06

Explanation:

first, we need to determine the price of ICI stock in 3 years:

stock price = dividend / (required rate of return - growth rate)

stock price = $6.72 / (11% - 2%) = $74.70

now we discount the next three dividends plus the stock price:

current stock price = $3.90/1.11 + $5.07/1.11² + $6.591/1.11³ + $74.70/1.11³ = $3.51 + $4.11 + $4.82 + $54.62 = $67.06

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23

i think the answer would be b hope this