Among Homer Simpson's many experiences as an entrepreneur is the time that he started a firm to recycle used grease. Thecurrent dividendon this stock is$0.55, and Homer expects that thedividend growth ratewill be7%for each of thenext two years, and then willremain steady at 9% thereafter. Given the risky nature of purifying grease, prospectiveinvestors require a 15% rate of returnif they are to invest in the stock of this enterprise. How much is this stockworth today? Based on the above information.

How much should you expect the stock tocost in two years?