Danny Praise Computer Chips Ltd. is experiencing a period of rapid growth. Earnings and

dividends are expected to grow at a rate of 15 percent during the next 2 years, at 13

percent in the third year, and at a constant rate of 6 percent thereafter. Danny Praises last

dividend was GH1.15, and the required rate of return on the stock is 12 percent.

Calculate the value of the stock today.

(i)Calculate P₁ and P₂.

(ii)Calculate the dividend yield and capital gains yield for Years 1, 2, and 3.