Answer: $28.55
Explanation:
From the question, we are told that Asonia Co. will pay a dividend of $4.60, $8.70, $11.55, and $13.30 per share for each of the next four years, respectively and that the investors require a return of 10.8 percent on the company's stock.
The stock price will be calculated as:
= $4.60/(1 + 0.108) + $8.70/(1 + 0.108)^2 + $11.55/(1 + 0.108)^3 + $13.30/(1 + 0.108)^4
= $28.55
Therefore, the stick price is $28.55
