) EFG Company is experiencing a rapid growth at the moment. It is estimated that the company will grow at a 20% (g1) for the next three years and the growth rate (g2) will be 30% from year 3 to year 4, and will remain at a growth rate of 5% (g3) thereafter (from year 4 to year 5 and onward). If the required rate of the stock is 10%, and the current stock price is $50, calculate the followings.

(a) Calculate the dividends of i) years 3, ii) year 4 and iii) year 5 (express all in terms of current dividend, D0).

(b) Calculate the stock price in year 4 (P4) (express all in terms of current dividend, D0). (c) Calculate the current dividend (D0) using information in (a) and (b) above. (d) Calculate the year 1 dividend (D1). (e) Recalculate the stock price in $ for (i) year 4 (P4) and (ii) year 0 (P0).