Nonconstant growth valuation
Hart Enterprises recently paid a dividend, D0, of $3.75. It expects to have nonconstant growth of 14% for 2 years followed by a constant rate of 4% thereafter. The firm's required return is 20%.
a. What is the firm's horizon, or continuing, value? Round your answer to two decimal places.
b. What is the firm's intrinsic value today?