is this answer right or not

1.Assume that the average firm in your company's industry is expected to grow at a constant rate of 6 percent and its dividend yield is 7 percent. Your company is about as risky as the average firm in the industry, but it has just successfully completed some R&D work that leads you to expect that its earnings and dividends will grow at a rate of 10 percent [D1 = D0(1+g) = D0(1.50)] this year and 25 percent the following year, after which growth should match the 6 percent industry average rate. The last dividend paid (D0) was $1. What is the value per share of your firm's stock?

1.Assume that the average firm in your company's industry is expected to grow at a constant rate of 6 percent and its dividend yield is 7 percent. Your company is about as risky as the average firm in the industry, but it has just successfully completed some R&D work that leads you to expect that its earnings and dividends will grow at a rate of 10 percent [D1 = D0(1+g) = D0(1.50)] this year and 25 percent the following year, after which growth should match the 6 percent industry average rate. The last dividend paid (D0) was $1. What is the value per share of your firm's stock?

The company growth is different for Year 1 and year 2

Dividend at Year 0

$

1

Dividend at Year 1=1.5 x $1

Dividend at Year 2=1.25 x $1.5

Dividend at Year 2=1.06 x $1.875

1.988

6% growth and 7% Dividend Yield

Value of share at Year 3 start=Present value of Dividend Cash flow annuity at Year 3=D3/Dividend Yield =$ 1.988/7%

$

28.393

a

Present value year 3 share value=$28.39 x PVIF13%,2

$

22.236

b

Present value of Dividend at Year 2=$1.875 x PVIF13%,2

$

1.468

c

Present value of Dividend at Year 1=$1.50 x PVIF13%,1

$

1.327

Present value per share offirm's stock=a+b+c=$22.24+1.47+1.33

$

25.03