Martha works for a prominent technology company. Her company just paid a $1.50 dividend per share. The required return for her companys stock is 12%.

Question:

Consider the following information. Suppose Marthas company is expected to increase dividends by 12% in one year, and by 8% in two years. After that, her companys dividends will increase at a rate of 6% indefinitely. If the last dividend was $1.50 and the required rate of return in 12%, what is the current price of the stock?