Could I Industries just paid a dividend of $1.25 per share. The dividends are expected to grow at a 22 percent rate for the next six years and then level off to a 3 percent growth rate indefinitely. If the required return is 13 percent, what is the value of the stock today?

Now suppose Could I Industries expects to grow erratically over the next 4 years. It omitted its dividend this year. It plans to pay no dividends in years 1 & 2, and then pay dividends of 1.10 and 2.20 in years 3 and 4, respectively. Beginning in year 5 it expects its dividends to grow 3.5 percent per year into perpetuity. Because of this erratic growth, investors are demanding a return of 18%. What is the value of the stock today?