AVZ is a start-up company who is using all its cash to growth so it does not plan to pay dividends for the next

4

years.

The company then plans to start paying annual cash dividends, starting at the end of year

5,

of

$4.00

for

14

years. Thereafter, the company will assume a constant growth dividend policy and the estimated growth rate in dividends forever after that point is

2%.

The price of the stock is set to yield a return of

11%.

What is the price of this stock today?