Stocks in the United States usually pay **quarterly** dividends. For example, the retailer Wal-Mart Stores paid a $0.47 dividend every quarter over the 2013 calendar year and plans to pay a $0.48 dividend every quarter over the 2014 calendar year.

Using the dividend discount model and net present value techniques, calculate the stock price of Wal-Mart Stores assuming that:

- The time now is the beginning of January 2014. The next dividend of $
**0.48**will be received in**3**months (end of March 2014), with another 3 quarterly payments of $0.48 after this (end of June, September and December 2014). - The quarterly dividend will increase by
**2**% every year, but each quarterly dividend over the year will be equal. So each quarterly dividend paid in 2015 will be $0.4896 (##=0.48×(1+0.02)^1##), with the first at the end of March 2015 and the last at the end of December 2015. In 2016 each quarterly dividend will be $0.499392 (##=0.48×(1+0.02)^2##), with the first at the end of March 2016 and the last at the end of December 2016, and so on**forever**. - The total required return on equity is
**6**% pa. - The required return and growth rate are given as effective annual rates.
- All cash flows and rates are
**nominal**. Inflation is**3**% pa. - Dividend payment dates and ex-dividend dates are at the same time.
- Remember that there are 4 quarters in a year and 3 months in a quarter.

What is the current stock price?