The Extreme Reaches Corp.'s last annual dividend was $1.98 per share.The company is planning on paying $2,$2,$2.50,and $3 a share over the next 4 years,respectively.After that,the dividend will be a constant $2.50 per share per year.What is the current price of this stock if the rate of return is 13 percent?

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P₄ = $2.50 / 0.13 = $19.23 P₀ = $2 / 1.13 + $2 / 1.13² + $2.50 / 1.13³ + ($3 + 19.23)/ 1.13⁴ P₀ = $18.70