NASHORA Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 20% for the next 3 years, after which competition will probably reduce the growth rate in earnings and dividends to 10% and it's constant forever. The company’s last dividend, D , was $1.25, its beta is 1.20, the market risk premium is 8.50%, and the risk-free rate is 3.00%. What is the current price of the common stock? I need the normal calculation step not using any excel. Thank you.

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A:

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