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C8 0 2 A financial analyst has been and that Fast Starts beta ıs 1.75 The current earnings per share EPS is $2.50. The company has a 40% payout rat The analyst esimatest at the company ividend will grow at a rate of 25% this year, 20% next year, and 15% the following year. After three years the dividend is expected to grow at a constant rate of 7% a lowing Fast Start nc. a new high-growth company. She estimates that he current risk rate is 25% the market ns remiums The company is expected to maintain its current payout ratio. The analyst believes that the stock is fairly priced. What is the current price of the stock? 10 12 13 14 15 16 17 18 19

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Calculate the current priceas follows 65 Particulars 66 Risk free rate 67 Market risk premium 68 Beta 69 Expected rate 70 EPS 71 Dividend 72 Dividend1 73 Dividend2 74 Dividend3 75 Price at end 76 Rate 6.25% 5% 1.75 15.00% $2.50000 $1.00000| PVF @ 15% $1.25000 0.869565217 $1.500000.756143667 $1.725000.657516232 | PV of the amount $1.08696 $1.13422 $1.13422 $15.1701:3 $23.07188 0.657516232 Current price of the stock $18.53 Formulas Rate 0.0625 0.05 1.75 166+(167*168) 2.5 65 Particulars 66 Risk free rate 67 Market risk premium 68 Beta 69 Expected rate 70 EPS 71 Dividend 72 Dividend1 73 Dividend2 74 Dividend3 75 Price at end 76 70 * 40% 171*(1+25%) 172*(1+20% PVF @ 15% -1/(1+1596)^1 -1/(1+15%)2 -1/(1+15%)13 PV of the amount |#72*172 1:173 *173 |#74*174 |#75*175 :173*(1+15%) (174*(1+7%))/(169-796) |-1/(1+15%)^3 Current price of the stock SUM(K72:K75)

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