2. You have the opportunity to buy a stock that just paid a dividend (D₀) of $3.00. After doing some research, you have forecasted the following growth rates for the firms dividends:

g₁ = -30% g₂ = 0% g₃ = 60% g₄ = 30% g_5-infinity = 4%

In addition, you estimate that the required return for this stock should be 9%. Show your work.

1. Calculate the forecasted dividends for years 1 through 5
2. Calculate the forecasted stock price for year 4 (which represents the value of all dividends in years 5 through infinity as of four years from today)
3. Calculate the value of the stock today