Question: Assume that a high tech company is expecting to grow at a rate of 25% over the next 4 years, and then decline over the next 3 years (years 5-7) to a growth rate of 10%. Determine the price of the stock that is currently paying a $1 dividend and has a discount rate of 17% by using:
a. the three-stage growth model
b. the H-model
c. explain the reasons for the difference