21. Solar Co. just paid a dividend of $1.60. Analysts expect the
company's dividend to
grow by 12% for 3 years and then the rate of growth changes to 6% per year from Year 4
onwards. Determine the value of this stock if the required rate of return is 8%?
(a) What is the total present value of the dividends for the
first 3 years (stage I)
(b) What is the present value of cash flows during the stage II
(c) What is the price of this stock?
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