Stock Valuation: SPF paid div. of $3/share on stock

[barn]

I am lost with this!!

Smashed Pumpkin Farms (SPF) just paid a dividend of $3 on its stock. The growth rate in dividends is expected to a constant 5% per year, indefinitely. Investors require a 16% return on the stock for the first 3 years, a 14% return for the next 3 years, and then an 11% return , thereafter. What is the current share price for SPF stock?

 

[tkhunny]

Again, isn't this a simple present value?

Growth: r = 1.05

Payments are like this

3r, 3r^2, 3r^3, etc...

PV is like this

3r/1.16 + 3r^2/1.16^2 + 3r^3/1.16^3 + 3r^4/(1.16^3*1.14) + 3r^5/(1.16^3*1.14^2) + 3r^6/(1.16^3*1.14^3) + 3r^7/(1.16^3*1.14^3*1.11) + ...

Adding all that isn't TOO terrible. It might be easier this way.

3r/1.16(1 + r/1.16 + r^2/1.16^2) + [3r^4/1.16^3*1.14](1 + r/(1.14) + r^2/(1.14^2) + r^3/(1.14^2*1.11) + ...)

I get 46.49701.