SOLVE FOR B AND PLEASE EXPLAIN THE STEPS PROPERLY

6. Shares of Viscount Industries Limited trade publicly. For the next year, dividends are expected to grow 15%. For the two years after that, the annual dividend growth rate will be 11%. Finally, there will be steady annual dividend growth at a rate of 61% from then on. The company just paid a dividend of $2.50. Investors require a rate of return of 14%. a. Determine how much you should pay for this stock. D. -2.50 D = 2.875 D2 = 3.19125 D3 = 3.54223 Po = 2.875/1.14 +3.19125/1.14 + ((3.54223/(0.14 - 0.065))/1.142 = 41.32 b. You buy the stock at the price found in part (a) and sell it after three years. Calculate the rate of return (annual) you will receive if you do not reinvest the dividends after you receive them