The required rate of return on the shares in the company is 15 % pa. Reduction Ltd's current dividend per share is 60 cents. The dividend of the company has been growing at 12 % pa in recent years, a rate expected to be maintained for a further 3 years. It is envisaged that the growth rate will then decline to 5 percent pa and remain at that level indefinitely.

could you explain to me the solution? Especially can't understand why 1/(1.15)3 .