Problem:
City Foods, is a firm that is experiencing rapid growth. The firm just paid a dividend of $2.00 yesterday. They expect to see their dividend grow at a twenty percent rate for the next two years and then level out at a continuous six percent growth rate. City Food's required rate of return is twelve percent.
Required:
Question: What is the most you would pay for City Foods' common stock now?
Note: Please provide through step by step calculations.