Variable growth a fast-growing firm recently paid a, Ask an Expert

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VARIABLE GROWTH A fast-growing firm recently paid a dividend of $0.35 per share. The dividend is expected to increase at a 20 percent rate for the next three years. Afterwards, a more stable 12 percent growth rate can be assumed. If a 13 percent discount rate is appropriate for this stock, what is its value?

Please do not copy the answer from the textbook and put in formula format. Please write it out so that I can get copy and paste into a calculator.

i.e-- 0.4*1.25/1.125 + 0.4*1.25^2/1.125^2 + 0.4*1.25^3/1.125^3 +0.4*1.25^4/1.125^4 + (0.4*1.25^4*1.11/(12.5%-11%))/1.125^4

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Financial Management, Finance

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