The most recent annual dividend per share (DPS) of XYZ Company was shs. 2. The firm's

financial manager expects that this dividend will grow at a 20% p.a rate over the next three

years due to introduction of a new product line. At the end of 3 years the firms mature product

line is expected to result in a reduction in dividend growth rate of 8% p.a for the foreseeable

future. The firms required rate of return is 12%.

required : the current value of the common stock