The MegaStart Corporation just paid a $0.8quarterly dividend. The dividends are expected to grow at 20% per year for the next 3 years. After that, the growth rate is expected to go down to the industry average of 8% per year and stay at this level forever. The required rate of return on MegaStart is 15% per annum.

a.Draw the time line, showing dividends of MegaStart.

b.Find the price of Megastart stock.

c.Find the value of its growth opportunities (PVGO).

d.What is the effective annual rate (EAR) of return on the MegaStart stock?

Please do not use excel functions