Suppose that a firm is expected to pay $3 dividend per share next year (D₁ = $3). The dividend will grow at a rate of 30% per year for the next four years and then at a constant rate of 6% thereafter. The firms stock has a beta of 1.6, the risk-free rate is 4%, and the market risk premium is 6%.

1. Calculate the firms stock price today using the non-constant growth model. (3 pts)

2. Calculate the firms stock price today using the H-model. (3 pts)