Black Kat Inc. is expecting a period of intense growth, so it has decided to retain more of its earnings to help finance that growth. As a result it is going to reduce its annual dividend by 10% a year for the next three years. After that it will maintain a constant dividend of $0.75 a share. The company just paid a dividend of $1.80 per share. What is the market value of this stock if the required rate of return is 13%?

the answer is $7.48 , would like to have an explanation