Non-Constant Dividend Pattern
The Rapid Growth Company is expected to pay a dividend of $1.00 at the end of this year
Thereafter, the dividends are expected to grow at the rate of 25% per year for 2 years, and then drop to 18% for 1 year, before settling at the industry average growth of 10% indefinitely
If you require a return of 16% to invest in a stock of this risk level, how much would you justified in paying for this stock?