Question: Management has indicated that it plans to pay a $0.25 dividend 3 years from today, then to increase it at a relatively rapid rate

Management has indicated that it plans to pay a $0.25 dividend 3 years from today, then to increase it at a relatively rapid rate for 2 years, and then to increase it at a constant rate of 8.00% thereafter. Management's forecast of the future dividend stream, along with the forecasted growth rates, is shown below. Assuming a required return of 11.00%, what is your estimate of the stock's current value? Use the dividend values provided in the table below for your calculations. Do not round your intermediate calculations. Year Growth 0 1 2 3 4 5 6 90.00% 45.00% 8.00% rate Dividends $0.000 $0.000 $0.000 $0.250 $0.475 $0.689 $0.744 Answer: $15.62

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