Let calculate the dividend year using the formula

- Then, the growth rate drops to 4% thereafter.

- The company just paid a dividend of $2.65.

Dividend growth rate for the next 6 years: 15%

Dividend growth rate thereafter: 4%

To calculate the present value of dividends during this period, we can use the formula for the present value of a growing perpetuity:

PV = D1 / (r - g)

PV_high_growth = D1 / (r - g) = $3.0475 / (0.10 - 0.15) = -$60.95 (negative because the growth rate is higher than the required return)

Present value of dividends during the stable growth period (after year 6):

D6 = D5 * (1 + g) = $3.0475 * (1 + 0.04) = $3.1706

Using the formula, we can calculate the present value of dividends during the stable growth period: