A stock just paid an annual dividend of $$2\mathrm{.}7.$ The dividend is expected to grow by $9\%$ per year for the next $3$ years. The growth rate of dividends will then fall steadily $($linearly$)$ from $9\%$ after $3$ years to $6\%$ in year $6.$

The required rate of return is $12\%.$

Attempt $8/10$ for $10$ pts$.$

Part $1$

What is the value of the stock if the dividend growth rate will stay $0\mathrm{.}06(6\%)$ forever after $6$ years?

Part $2$

In $6$ years, the P$/$E ratio is expected to be $17$ and the payout ratio to be $80\%.$ What is the value of the stock when using the P$/$E ratio?