A stock just paid an annual dividend of $2.2. The dividend is expected to grow by 10% per year for the next 3 years. The growth rate of dividends will then fall steadily (linearly) from 10% after 3 years to 7% in year 6. The required rate of return is 12%.   1.What is the value of the stock if the dividend growth rate will stay 0.07 (7%) forever after 6 years?   2.In 6 years, the P/E ratio is expected to be 25 and the payout ratio to be 80%. What is the value of the stock when using the P/E ratio? Thank you

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