Company A has just paid a dividend (D₀) of $1.50. The following are forecasted growth rates:

Year 1 100%

Year 2 50%

Year 3 25%

Year 4 10%

Year 5 5%

Year 6 and on -2% (Note: The constant growth rate here is negative 2%, not 2%.)

The firms cost of equity is 11% (i.e. investors require a 10% return on this stock).

3. Calculate the value of the stock today. (Reminder: The value of any financial asset is the present value of future cash flows, which are D1, D2, D3, D4, D5, and P5 in this problem. D5 and P5 are both at the end of year 5.)