NONCONSTANT GROWTH STOCK VALUATION Snyder Computers Inc. is experiencing rapid growth. Earnings and dividends are expected to grow at a rate of 15% during the next 2 years, at 13% the following year, and at a constant rate of 6% during Year 4 and thereafter. Its last dividend was $1 15, and its required rate of return is 12%.
a. Calculate the value of the stock today.
c. Calculate the dividend and capital gains yields for Years 1, 2, and 3.