SlowGrowth Corporation currently pays a dividend of $2.3 per year. Stock analysts expect the company would continue to pay the current dividend amount for three years and, after the three years, increase dividend by 2% per year in perpetuity. According to the stock analysts forecast of future dividends, what should be the stock price today if the discount rate is 4%?

I'd like to know if I am right? Thanks a lot.

4 . Year 1 - 4 PO = Div3\ __Dive ive + 17 - 1 2) 2 { (ITR ) 3 + ( HR ) 4 7:04 2 . 3 * ( 1 . 04 / 1 2.3* ( 1.04 1- 1\ \2.3 x ( 1 . 04 ) 3 1. 04 2 1.04 3 ( 1.04 1 4 - $8. 8:4 6 2 Dive = DIVI X ( 1 + R ) 3 = 2. 3 * ( 1 + 4 % ) 3 = 2. 5 87 2 Year S - Divs = Diva x ( 1 + 9 ) = 2. 58 72 x ( 1 + 2 % ) = 2. 63 89 The price end of year 4 : P4 = Divs = 2.6389 - $ 131.945 R - 9 1 4 % 0 - 20/ 03 The present value of P's as of today PR = 131- 945* ( 1 + R 7 4 \( 1 + 4 % ) 4\ = $1 12. 787 1 The stock price today : $ 8.8462 + $ 12. 7871 = $121. 633 3