The earnings for a stock are growing fast for the first 4 years so the Dividends will be high and after that you expect that earnings will slow to a constant growth so that Dividends will grow at a constant rate of 6%. Assume the Dividends and required rate of return are as shown below. The equivalent price in year 4 (P4) of all the future dividends is equal to $ and the current price of the stock is $ DIV1 = $1.2 DIV2 = $2.11 DIV3 = $3.35 DIV4 = $4.02 Constant growth in Dividends after year 4, g = 6% Required rate of return on Stock, ks = 12%