You remember that it is easy to compute a constant dividend

Question

You remember that it is easy to compute a constant dividend growth model so that is your first approach.  From some analysis, you decide that the required return for Northwest's stock is 8%.

However, you realize that that Northwest has not been growing their dividends by a constant rate.   Based on this you develop a forecast for Northwest's future dividends.

Dividend Forecast

Time    Year     Dividend         

0          2017    $0.60   Actual (assume D₀= $0.60)

1          2018    $0.64   Forecast

2          2019    $0.68   Forecast

3          2020    $0.72   Forecast

4          2021    $0.76   Forecast

5          2022    $0.80   Forecast

After 2022, you forecast that Northwest Savings Bank will perpetually grow their future dividends at 3% in perpetuity. Based on this non-constant dividend growth model, what price do you estimate for Northwest Savings Bank?