Company alpha has just been organized. It is expected to experience zero growth next year and grow at a 10% rate in years 2 and 3. Beginning in the fourth year the company should attain a 5% growth rate which it will sustain thereafter. The last dividend paid was $1.0 per share. If the required return is 12%, what should be the present price of the stock?

What should be the price of the stock at the end of the first year? What estimated return would an investor earn holding the stock of Company alpha for the next year