The stock of Dravo Corporation currently pays a dividend (D0) at the rate of $2 per share.
This dividend is expected to increase at a 9 percent annual rate for the next three years, at a 7 percent annual rate for the following two years, and then at 4 percent per year thereafter.
What is the value of a share of stock of Dravo to an investor who demands a 24 percent rate of return on this stock?