NONCONSTANT GROWTH STOCK VALUATION Snyder Computers Inc. is experiencing rapid growth. Earnings and dividends are expected to

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NONCONSTANT GROWTH STOCK VALUATION Snyder Computers Inc. is experiencing rapid growth. Earnings and dividends are expected to grow at a rate of 15% during the next 2 years, at 13% the following year, and at a constant rate of 6% during Year 4 and thereafter. Its last dividend was $1 15, and its required rate of return is 12%.

a. Calculate the value of the stock today.

b. CalculateP^

1 andP^

c. Calculate the dividend and capital gains yields for Years 1, 2, and 3.

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