Motor Homes Inc. (MHI) is presently in a stage of abnormally high growth because of a surge

Question:

Motor Homes Inc. (MHI) is presently in a stage of abnormally high growth because of a surge in the demand for motor homes. The company expects earnings and dividends to grow at a rate of 10 percent for the next 4 years, after which time there will be no growth (g = 0) in earnings and dividends. The company’s last dividend was $1.50. MHI’s beta is 1.6, the return on the market is currently 12.75 percent, and the risk-free rate is 4 percent. What should be the current common stock price?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...