Two-Stage Dividend Growth Model Formula 51 Corp. just paid a dividend of $1.45 per share. The dividends

Question:

Two-Stage Dividend Growth Model Formula 51 Corp. just paid a dividend of $1.45 per share. The dividends are expected to grow at 30 percent for the next eight years and then level off to a 7 percent growth rate indefinitely. If the required return is 13 percent, what is the price of the stock today?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...