Jedi Corp. common stock is expected to pay their first dividend of $2 at the end of two years from today. Once the firm starts paying dividends, analysts expect the dividends to grow at a supernormal rate of 8% for the next year, and then attain a constant growth of 2% forever thereafter. The required rate of return on the stock is 7.5%.

1. a) What is the value of Jedis stock today?

2. b) In addition to the regular dividend stream, Jedi Corp. has announced that they will distribute a special dividend of $1.35 per share at the end of each of the first three years. What will be the value of the stock today?