You have been asked to price the stock of Infotech, a technology company. The following information has been provided to you; Because the company re-invests most of its earnings to grow the company, Info tech will pay a low and constant dividend of $.50 per share in each of the next 3 years. In year 4 the dividend(D4) jumps to $5 per share and grows at a constant rate of 10 percent per year. Assume a required rate of return on the stock of 15 percent.

1) What would the price of the stock be in year 3? 2) What is the price of the stock today? 3) If the company suffers an unexpected event causing it to drop its first 3 dividends, what would be the price of the stock today assuming the remaining information on the stock is unchanged (i.e. D4, the growth rate and the required rate of return)?