Indicate the future dividends and the future stock price

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Marcel Co. is growing quickly. The company just paid a dividend of $2.00. Dividends are expected to grow at a 25% rate for the next three years, with the growth rate falling off to a constant 5% thereafter.

If the required return is 7%, what is the current stock price? (Please explain all of your work. That is, indicate the future dividends and the future stock price that you need to do this calculation to receive partial credit).

Walk me through this problem step by step or write the formula with the numbers filled in so I can practice.

Reference no: EM131524222

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