Spreadsheet Problem: Variable Growth Design a spreadsheet similar to the one below to compute the value of a variable growth rate firm over a five-year horizon.

a. What is the value of the stock if the current dividend is $1.30, the first-stage growth is 18 percent, the second-stage growth is 9 percent, and the discount rate is 11 percent?

b. What is the value of the stock if the current dividend is $1.30, the first-stage growth is 2 percent, the second-stage growth is 8 percent, and the discount rate is 9.5 percent?

c. What is the value of the stock if the current dividend is $2.50, the first-stage growth is 15 percent, the second-stage growth is 7 percent, and the discount rate is 10 percent?

A B C D E 1 2 Inputs Current dividend = 3 First-stage growth= 4 Second-stage growth = 5 Discount rate= 6 7 8 Year Projected dividend 9 10 Present value= 1 2 F LL. 3 4 5 Terminal price: Terminal price =