Problem:
Suppose the dividend today, Do, is $2.50, and the growth rate (g) is expected to be 25% for the next 3 yrs, followed by a normal growth rate (g) of 6% thereafter. Assume the investors require 13%, rs.
Requirement:
Question: Calculate the value of the stock today, Po. This is a super normal growth problem.
Note: Explain all steps comprehensively.