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Grieve Electronics has been undergoing rapid

Grieve Electronics has been undergoing rapid growth for the last few years. The current dividend per share is expected to grow at a rapid rate of 20% a year for the next three years. After that time, Grieve’s dividend growth is expected to slow to a more normal rate of 7% a year for an indefinite future. Because of the risk involved with such a rapid growth, the required rate of return on the stock is 22%. Calculate today’s theoretical (fair) price of the stock. Hint: Use the 20% dividend growth rate to calculate the expected dividends for the first three years: D1, D2, and D3

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