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4. Finster Corporation just paid a dividend of $1.75. This company is expected to experience abnormally high growth for the next five years: 50 percent

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4. Finster Corporation just paid a dividend of $1.75. This company is expected to experience abnormally high growth for the next five years: 50 percent in the first two years, 30 percent in the next two years, and 20 percent in year 5. After that, the growth is expected to settle down to 7 percent per year forever. If we assume that investors' required rate of return is 10 percent, compute the current price of the stock. Fraser Inc. paid a dividend of $5.00 earlier today. Your stockbroker believes that the stock will sell for $85.36 in two years. This price is based on her belief that the stock's dividends will grow at a rate of 20% for the next two years and that the appropriate discount rate for this stock is 16%. Suppose your stockbroker tells you that she determined that the stock would sell for $85.36 in two years by using the constant growth model of stock valuation based on the dividends from year three forward. What constant dividend growth rate must she be assuming from year three forward

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