Problem:
Combined Communications is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 15 percent a year for the next 4 years and then decreasing the growth rate to 3.5 percent per year. The company just paid its annual dividend in the amount of $0.20 per share.
Required:
Question: What is the current value of one share of this stock if the required rate of return is 15.5 percent?
Note: Explain all steps comprehensively.