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Nonconstant growth: Tre-Bien, Inc., is a fast-growing technology company. The firm projects a rapid growth of 30 percent for the next two years, then a
Nonconstant growth: Tre-Bien, Inc., is a fast-growing technology company. The firm projects a rapid growth of 30 percent for the next two years, then a growth rate of 17 percent for the following two years. After that, the firm expects a constant growth rate of 8 percent. The firm expects to pay its first dividend of $2.45 a year from now. If the required rate of return on stocks with similar risk is 22 percent, what is the current price of the stock?
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