Storico Company just paid a dividend of $1.35 per share. The company will increase its dividend by 24 percent next year and will then reduce its dividend growth rate by 6 percentage points per year until it reaches the industry average of 6 percent dividend growth, after which the company will keep a constant growth rate forever. If the stock price is $44.39, what required return must investors be demanding on the company's stock?

Hint : This means that the company hits the industry average of 6% in year t = 4. See g = 24% in year 1, g = 18% in year 2, g = 12% in year 3 and g = 6% in year 4. Calculate P3 and set up the pricing equation correctly. You dont know the return on equity. But notice this is same as an IRR calculation. So use the IRR function in your calculator to solve for the interest rate. Hope this hint helps :)