ABC Co. has just paid a $1.50 dividend and expects the dividends to grow at a rate of 4% forever. The expected annual return is 7%.

ABC Co. has just paid a $1.50 dividend and expects the dividends to grow at a rate of 4% forever. The expected annual return is 7%. Remember, paid dividends are already incorporated in the current price

1. What is the price of the stock today? (2 marks)
2. What will the price be in 5 years? (2 marks)