It is a company listed on Euronext Paris. You want to buy shares in this company. You wonder whether the stock price corresponds to its equilibrium value.

To answer your questions, you decide to value the stock according to the Dividend Discount Model (DDM). As the company is not yet mature, the DDM with several periods would be the most appropriate model. Indeed, the life cycle of the company. can be divided into 3 phases. First, over the next 4 years, it will be able to continue its growth phase. During this period, its growth will be steady, its dividend policy moderate and its business risky. Then, during the next 4 years, the company will be almost mature. Its growth will slow down; it will distribute more dividends, especially since the risk of its activity will be reduced. Finally, beyond this period, when the company has reached its maturity phase, its growth will stabilize in the long term and its risk will be lower.

The forecast information for the company for each of these periods is as follows:

- Growth phase (the next 4 years):

o Next year's earnings per share (EPS) will be 7 ;

o Annual EPS growth rate is 30%;

o Dividend payout ratio is 20% ;

o The share is 1.5.

- Near-maturity phase (the next 4 years):

o Annual EPS growth rate is 10% ;

o The dividend payout ratio is 50% ;

o The share is 1.

- Maturity phase (beyond the first 8 years):

o The long-term growth rate (to infinity) g is 0.06 per year;

o The action is 0.75.

In addition, the risk-free rate is 2% and the market risk premium is 8%.

The former intern started the equilibrium stock price valuation of the company. The forecast table for the finite period (Growth Phase and Near-Maturity Phase) is shown below:

Complete the valuation of this stock and give its equilibrium price.

(rounding = 3 decimals!!)

Growth phase Near-maturity phase 1 2 3 4 5 6 7 7.000 9.100 11.830 15.379 16.917 18.60720.407 30% 30% 30% 10% 10% 10% 8 22.517 10% BPA VARIATION % N-1 distribution rate DPA 20% 20% 20% 20% 50% 50% 50% 50% 1.400 1.820 2.366 3.076 8.459 9.305 10.235 11.259 Growth phase Near-maturity phase 1 2 3 4 5 6 7 7.000 9.100 11.830 15.379 16.917 18.60720.407 30% 30% 30% 10% 10% 10% 8 22.517 10% BPA VARIATION % N-1 distribution rate DPA 20% 20% 20% 20% 50% 50% 50% 50% 1.400 1.820 2.366 3.076 8.459 9.305 10.235 11.259