A company has unexpectedly high growth rate for initial years. Earnings and dividends are expected to grow at a rate of 40 percent during the next 2 years, at 25 percent in the third year, and at a constant rate of 8 percent thereafter. The companys current year dividend is Rs.10, and the required rate of return on the stock is 13 percent.

1. Calculate the value of the stock today.

2. Calculate the value of the stock after 1^st year, 2^nd year and 3^rd year.

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

4. Calculate the beta of the stock when the risk free return is 8% and market risk premium is 5%.