Experiencing rapid growth. Dividends are expected to grow at 25 percent per year during the next three years, 18 percent over the following year, and then 8 percent per year, indefinitely. The required return on this stock is 15 percent, and the stock currently sells for $60.00 per share. What is the projected dividend for the coming year

The coming year dividend is 2.9762

Explanation:

Let us suppose the dividend of the current year is x so

Here div is the dividend which is to be found as x

r is the growth rate given as 25% for first 3 years, 18% for fourth year and 8% onwards

rr is the stock rate of return which is given as 15%

Current value is given as 60

So

So the current year dividend is 2.381, the next year dividend is given as

Next year =Current Year * (1+r%)

Next year =2.381 * (1.25)

Next year=2.9762

So the coming year dividend is 2.9762

the answer is a. $209,000