31. Nonconstant Growth. Phoenix Industries has pulled off a miraculous recovery. Four years ago it was near bankruptcy. Today, it announced a $1 per share dividend to be paid a year from now, the...

Extracted text: 31. Nonconstant Growth. Phoenix Industries has pulled off a miraculous recovery. Four years ago it was near bankruptcy. Today, it announced a $1 per share dividend to be paid a year from now, the first dividend since the crisis. Analysts expect dividends to increase by $1 a year for another years. After the third year (in which dividends are $3 per share), dividend growth is expected to settle down to a more moderate long-term growth rate of 6%. If the firm's investors expect to earn a return of 14% on this stock, what must be its price? (LO7-2) 2