Some investors expect Mazzeo Industries to have an irregular dividend pattern for several years and then to grow at a constant rate. Dividends are expected to grow by $25\%$ for two years and $20\%$ for the next three years. After that, growth will fall to a constant rate of $7\%.$ Last year$$s dividend was $$1\mathrm{.}00.$ This amount of risk justifies a beta of $1\mathrm{.}5.$ Currently, the S&P $500$ market risk premium is $8\%$ with T$-$bill rate of $2\%.$ If these projections are correct, what should the stock be valued at today?

Some investors expect Mazzeo Industries to have an irregular dividend pattern for several years and then to grow at a constant rate. Dividends are expected to grow by $25\%$ for two years and $20\%$ for the next three years. After that, growth will fall to a constant rate of $7\%.$ Last year$$s dividend was $$1\mathrm{.}00.$ This amount of risk justifies a beta of $1\mathrm{.}5.$ Currently, the S&P $500$ market risk premium is $8\%$ with T$-$bill rate of $2\%.$ If these projections are correct, what should the stock be valued at today?

$$42\mathrm{.}65$

$$27\mathrm{.}73$

$$34\mathrm{.}21$

$$17\mathrm{.}79$