What is SDI’s required rate of return (ks) using nonconstant DCF methodology? Assume the
following conditions: SDI’s current stock price is $15; investors expect a dividend cut to
$0.20 in 1997, after which the company will experience a supernormal dividend growth rate
of 20 percent per year out to 2001 and a normal growth rate of 14.9 percent in 2002 and
thereafter.