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QUESTION

There is a firm which grows 500% the first year and 200% the second year. Its dividend at the present is $ 1. Beyond the second year, it grows...

There is a firm which grows 500% the first year and 200% the second year. Its dividend at the present is $ 1. Beyond the second year, it grows perpetually at a constant rate. Its dividend payout ratio is .7, Its D/E is 80/20, its tax rate is .2, and its unlevered beta is 2.2. The net profit margin is .15. The asset turnover ratio is 3. The market premium is .04 and the risk free rate is .02. If the information for the last three sentences is applying to year 3, compute the price of the company.

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