A company just paid an annual dividend of Rs.2. The dividend is expected to grow 30% per

year for the next two years and at a more sustainable growth rate thereafter. Two years later

the expected sales of the company are likely to be Rs.100 million and a net profit of Rs.10

million. The total Debt of the company is expected to be Rs.30 million and Total Equity of

Rs.10 million. The Company is likely to maintain a dividend pay-out ratio of 30% after 2

years and that is likely to continue forever. Find the current price of the stock which has a

beta of 1.2. The risk-free rate is 6% and the market risk premium is 6%.