### Constant Growth Stock Valuation

Suppose a firm's common stock paid a dividend of $2.50 yesterday. You expect the dividend to grow at the rate of 5% per year for the next 3 years, if you buy the stock, you plan to hold it for 3 years and then sell it. a.Find the expected dividend for each of the next 3 years; in other words, calculate D1 , D2 and D3 . Note