Problem 12-27 The Nonconstant, or Supernormal Dividend Growth Model Flash in the Pan Corporation Given: Year Year Year Year 3 30% Year 5 10% 10% Year 6 and on 5% 20% 20% Dividend growth rates Dividend expected 1 year from now Assumed required rate of return $3.00 15% Calculations: a. Present value of Dividends during the supernormal growth period: Expected future dividends during the supernormal growth period Present values of dividends during the supernormal growth period Total b. Present value of dividends during the normal growth period (year 6 and on) Terminal value at end of year 5 per Equation 12-7 Present value of terminal value c. Total present value per share of Flash in the Pan Corp. stock