The following formulas are for Problem #6 to #7. The Two-Stage Dividend Growth Model formula is: P_0 = D_0(1 + g_1)/k - g_1[1 - (1 + g_1/1 + k)^1] + (1 + g_1/1 + k)^7 D_0(1 + g_2)/k - g_2 Constant perpetural dividend growth P_0 = D_0 times (1 + g)/k - g = D_1/k - g (Important: g