Hi, this is the question:

Deployment Specialists pays a current (annual) dividend of $1 and is expected to grow at 18% for two years and then at 4% thereafter. If the required return for Deployment Specialists is 7.5%, what is the intrinsic value of Deployment Specialists stock?

I can't seem to get the right answer. Here is what I have so far:

D0=1

D1=1.18

D2=1.39

D3=1.45

P3= 1.45/(.075-.04) = 41.30

1.18/1.075 + 1.39/1.075^2 + 42.75/1.075^2 = 1.10 + 1.20 + 36.99 = 39.29.

Thanks for the help.