Maxwell Communications paid a dividend of $1.20 last year. Over the next 12 months, the dividend is expected to grow at 15 percent, which is the constant growth rate for the firm (g). The new dividend after 12 months will represent D₁. The required rate of return (K_e) is 22 percent.

Compute the price of the stock (P₀)

Compute the price of the stock (P₀)