Question: A stock, which currently does not pay a dividend, is expected to pay its first dividend of $2.00 per share in six years. After the

A stock, which currently does not pay a dividend, is expected to pay its first dividend of $2.00 per share in six years. After the dividend is established, it is expected to grow at an annual rate of 20 percent per year for the following three years and then grow at a constant rate of 5 percent per year thereafter. Assume that the risk-free rate is 5.5 percent, the market risk premium is 4 percent, and that the stocks beta is 1.5. What is the expected price of the stock today?

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