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Connors Company - Current stock price

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The Connors Company last dividend was $1.00. Its divident growth rate is expected to be constant at 15% for 2 years, after which dividends are expected to grow at a rate of 10% forever. Connors required return(rs) is 12%. What is Connors' current stock price?

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The solution calculates the Connors Company's stock price.

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Its dividend will be:
Year Dividend
0 1
1 = D0*(1+15%) = 1.15
2 = D1*(1+15%) = 1.32
3 = D2*(1+10%) ...

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