A company currently pays a dividend of $3 per share (D0 = $3).

A company currently pays a dividend of $3 per share (D0 = $3). It is estimated that the company's dividend will grow at a rate of 21% per year for the next 2 years, and then at a constant rate of 7% thereafter. The company's stock has a beta of 1.75, the risk-free rate is 6.5%, and the market risk premium is 6%.