What is the multi-stage DDM applied price of a stock

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Question - What is the multi-stage DDM applied price of a stock that is expected to begin paying a $3 dividend 6 years from now. The firm is expected to grow dividends by 15% per year for the next four years after that, followed by a constant growth rate of 4% thereafter forever. Assume that investors require a rate of return of 16% for this firm's common shares.

a. $11.23

b. $25.75

c. $16.36

d. $18.75

Reference no: EM132846926

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