Question: Calculate the current price of a stock given the following information:
The required rate of return of the stock is 7%. From time period 0 to the end of the second period, the growth rate is 20%. From the beginning of time period 3 to the beginning of time period 4, the growth rate is 5%. From the beginning of time period 4, the dividend grows 3% in perpetuity. D0 = $3.00