Multiple growth rates. Greta’s Garden and Variety began issuing common stock 12 years ago. Eight years ago, Greta issued her first dividend at $0.10 per share. For each year since then, she had increased the value of the dividend by 5%. Today, after a meeting with her board of directors, she has decided some changes need to take place. Her firm is currently going through a growth spurt and needs all the funds it can manage just to run operations at a level that meets demand. Therefore, she has decided to not issue a dividend for the upcoming year, as well as the following two years

(times two and three). After that, she is confident that she can afford to issue a dividend of $0.20 at time four. She plans to increase this dividend by

$0.05 in each of the following four years thereafter. At that time, she thinks her cash flows will be adequate to produce a growth rate of 3% for the foreseeable future. If her required rate of return is 8.54%, what should be the current price of her stock?