Question: Eth is evaluating HRL Co. which has been growing at the annual rate of 15% for the last 5 years. Here is her forecast of

Eth is evaluating HRL Co. which has been growing at the annual rate of 15% for the last 5 years. Here is her forecast of the company's future dividend growth trend.

After considerable study, she has decided to use the following information in her valuation (as of the end of 2004):

Beta: 1.2.
2004 dividend: $5.
The risk-free rate: 4%.
Expected equity premium: 6%.

What is the value of the HRL's stock?

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