Question: An analyst estimates that Cheyenne Co. will pay the following dividends: D1 = $3.0000, D2 = $37.500 and D3 = $4.3125. The analyst also estimates

An analyst estimates that Cheyenne Co. will pay the following dividends: D1 = $3.0000, D2 = $37.500 and D3 = $4.3125. The analyst also estimates that the required rate of return on Cheyenne’s stock is 12.2 percent. After the third dividend, the dividend is expected to grow by 8 percent per year forever. What is the price of the stock today?

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