Part A: supernormal-growth stock valuation

A firms cash dividend is expected to grow at the following rates for the next 5 years. From year 6 on, its growth rate stabilizes at 5% into the foreseeable future. The firms required rate of return is 11.75%, and its most-recent dividend was at $1.75 per share.

Year	1	2	3	4	5	6 to infinity
Growth rate per year, %	30	25	20	15	10	5

i. Estimate the firms current stock price in $wx.yz format

ii. If the stock is trading at $50.00 per share, what is the implied required rate of return? Give answer in % to 4 decimal places. [Hint: use Data, What-if analysis, and Goal seek functions.]

May use IRR