Calculating the Share Price of the Stock Given the Data

SPF company has just paid a dividend of $3.00 on its stock. The growth rate in dividends is expected to be a constant 7.7% per year, indefinitely. Investors require an 18% return on the stock for the first 3 years, a 12% return for the next 3 years and then a 13% return thereafter. What is the current share price for SPF stock?

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Note: to arrive at the PV, you need to take into account the discount factor from years 1-3 AND years 3-6. Finally, from year 7 onwards, the discount factor (return expected by the ...