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25. Phillips, Inc. just paid a dividend of $3.25 per share on its common stock [that is, DD = 3.25). Investors expect the dividend to grow at 4D% in years 1 and 2, they expect the dividend to grow at 20% in year 3 and the},r expect that all future dividends (that is, dividends in years 4, 5, …, infinity] to grow at a constant rate of 5% per year. If the east of capital for Phillips, Ine. stnek is 15%, what is the current price of the stock?

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25. Phillips, Inc. just paid a dividend of $3.25 per share on its common stock [that is, DD = 3.25). Investors
expect the dividend to grow at 4D% in years 1 and 2, they expect the dividend to grow at 20% in year
3 and the},r expect that all future dividends (that is, dividends in years 4, 5, …, infinity] to grow at a
constant rate of 5% per year. If the east of capital for Phillips, Ine. stnek is 15%, what is the current
price of the stock?

 
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