Question

Really need help with this, thanks. Round to 2 decimal

"A stock just paid a dividend of $2.56. The dividend is expected to grow at 27.03% for two years and then grow at 3.01% thereafter. The required return on the stock is 13.16%. What is the value of the stock?

The risk-free rate is 1.49% and the market risk premium is 6.41%. A stock with a β of 1.24 will have an expected return of ____%."

Answer 1

	Required rate=	13.16%
Year	Previous year dividend	Dividend growth rate	Dividend current year	Horizon value	Total Value	Discount factor	Discounted value
1	2.56	27.03%	3.251968		3.251968	1.1316	2.8738
2	3.251968	27.03%	4.13097495	41.924	46.05497495	1.28051856	35.96588
	Long term growth rate (given)=	3.01%			Value of Stock =	Sum of discounted value =	38.84
Where
Current dividend =Previous year dividend*(1+growth rate)^corresponding year
Total value = Dividend + horizon value (only for last year)
Horizon value = Dividend Current year 2 *(1+long term growth rate)/( Required rate-long term growth rate)
Discount factor=(1+ Required rate)^corresponding period
Discounted value=total value/discount factor

Please ask remaining parts seperately, questions are unrelated