Question: show formula please 54 58 55 Example 8.2 Nonconstant Growth 56 57 Suppose a stock has a current dividend of $3. In the first 4

show formula please

54 58 55 Example 8.2 Nonconstant Growth 56 57 Suppose a stock has a current dividend of $3. In the first 4 years, the stock will grow at 8% per year. The stock will pay the following dividends and has the following required return Year 1 dividend: Year 2 dividend: Year 3 dividend Year 4 dividend: Required return 12.ON 59 GO 61 62 63 64 6.ON 66 6s Alter the fourth year, the dividends will grow at 67 What is the price of the stock? First, we need to find the price of the stock when it begins a constant growth rate, which is in your c. The price of the stock in Year 4 will be Price In Year 4 71 The price today is the present value of the future dividends, plus the present value of the future price, so 68 69 20 Price today za 24 75 76

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