Stock X is expected to pay a dividend of $5 next year. Thereafter, dividend growth is expected to be 20% a year for five years (i.e., years 2 through 6) and zero thereafter.

a. If the market capitalization rate is 10%, what is the value of the stock? Show all calculations and explain using a timeline.

b. If the stock market price is $100, would you buy this stock? Why? Why not? Explain your argument.