What is the current price of commission stock

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The Happy Cat Company has recently discovered a new type of kitty litter which is extremely absorbent. It is expected that the firm will experience (beginning now) an usually high growth rate 20%during the period 3 year it has exclusive rights to the property where the kitty litter material can be found. However the beginning of the fourth year the firm's competition will have access to the material and from that time on the firm will assume a normal growth rate of 8%annually. during the rapid growth period the firm dividend payout ratio will be relatively low (20%) to converse funds for reinvestment. However the dividend payout ratio will increase to 50% in year 4 Last year's earnings were $2 per share (EPS)and the firm cost equity is 10%

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Problem 1: What is the current price of commission stock?

Reference no: EM132815284

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