Problem:
Your company paid a dividend of $2.00 last year. The growth rate is expected to be 50% for 1 year, 10% the next year, 5% for the following year, and then the growth rate is expected to be a constant 1% per year thereafter. The required rate of return is 10%. What is the current stock price?
A. $27.74
B. $44.78
C. $37.27
D. $36.03
Additional Information:
This question is basically belongs to the Finance as well as it is about computation of current stock price.