Kruger Associates is considering a substantial investment in the stock of McIntyre Enterprises. McIntyre currently (time 0) pays a dividend of $1.50 per share. This dividend is expected to grow at 15 percent per year for the next 3 years and 10 percent per year for the following 3 years. McIntyre’s marginal tax rate is 40 percent.

Kruger expects the value of the McIntyre stock to increase by 50 percent between now and the beginning of year P=758