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A firm is expected to pay a dividend of $2.00 next year and $2.14 the following year. Financial analysts believe the stock will be at their target price of $65.00 in two years. Compute the value of this stock with a required return of 8 percent. Select one:

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Based on the dividends and the target price set by financial analysts, the value of the stock will be $57.40.

What is the value of the stock?

This can be found as:

= Present value of first dividend + Present value of second dividend + Present value of stock price in 2 years

Solving gives:

= 2 / 1.10 + 2.14/1.10² + 65/1.10²

= $57.40

Find out more on stock valuation at https://brainly.com/question/18141930.

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