You are evaluating a stock that is expected to experience supernormal povah in dividends of tow over the next two years. Following this period, dividends are expected to grow at a constant rate
of on. The stock pada dividend of lost year and the required return
on the stock 1. What is the fair present value of this stock?

Brian has just finished college. he wants to set up a small business to make and sell fireworks. he registers his company and acquires a license from the government. he finds that most of his competitors are selling fireworks at an extremely low price. he would like to make more money, so he decides to innovate and develop better fireworks. he sells his fireworks at a higher price, and they are a huge hit with the customers. after a few years, he earns enough profit to set up a bigger fireworks factory that complies with the government’s health and safety regulations. he even starts exporting fireworks overseas. which type of economy does this scenario describe?