Problem:
Chartreuse County Choppers, Inc. is experiencing rapid growth. The company expects dividends to grow at 16 percent per year for the next 10 years before leveling off at 6 percent into perpetuity. The required return on the company's stock is 11 percent.
Required:
Question: If the dividend per share just paid was $1.87, what is the stock price?
Note: Be sure to show how you arrived at your answer.