1. BTU Inc is a start-up. It expects to pay no dividends for the next four years. In five years (Year 5), it expects to pay a dividend of $5.00 per share, which it will increase by 10% per year for the following three (3) years (Years 6, 7 & 8). The dividend in in Year 9 will be 5% higher than the Year 8 dividend, and the growth rate will continue to be 5% per year there-after for the indefinite future. The required rate of return is 15%. Estimate the present (Year 0) stock price.

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