The Happy Cat Company has recently discovered a new type of kitty litter which is extremely absorbent.It is expected that the firm will experience(beginning now) an unusually high growth rate (20%) during the period (3 years) it has exclusive rights to the property where this kitty litter material can be found.However, beginning with the fourth year, the firm's competition will have access to the material and from that time on the firm will assume a normal growth rate of 8% annually.During the rapid growth period, the firm's dividend payout ratio will be relatively low (20%), to conserve funds for reinvestment.However, the dividend payout ratio will increase to 50% in year 4.Last year's earnings were $2 per share (EPS) and the firm's cost of equity is 10%.

Required:

What is the current price of the common stock?