Ok, so the question goes like this:

A company paid a dividend per share of $8 yesterday. Because of unusual high growth, the dividend is expected to increase by 20 % annually for the next two years. Thereafter a growth of 8 % is expected in all foreseeable future. Your required annual return is 20 %.

How much are you willing to pay for this stock today? Ignore any tax consequences.

So here is my thinking:

1) Since it paid out yesterday the next payout will happen in one year. Since our required return is 20 %, we discount by 1.20 for each period.

2) After the first two years we have a perpetuity. The present value of the cashflow is what we're willing to pay.

$\displaystyle P_0 = \frac{8\cdot 1.2}{1.2} + \frac{8 \cdot 1.2^2}{1.2} + \frac{8\cdot 1.2^2}{0.2-0.08} \approx 113.6$

This is not the correct answer. Where is my attempt at logic wrong?