Computation of Constant Growth Rate:

Here,

D1 = $2*(1+0.25) = $2.5

D2 = $2.5*(1+0.25) = $3.125

D3 = $3.125*(1+0.25) = $3.90625

Value after year 3 = (D3*Growth rate)/(Required return-Growth rate)

=(3.90625*(1+g)/(0.12-g)

Current Stock Price = Future Dividend and Value*Present value of discounting factor(Rate%,Time period)

58.88 = 2.5/1.12+3.125/1.12^2+3.90625/1.12^3+(3.90625*(1+g)/(0.12-g)/1.12^3

58.88=7.5038+(3.90625*(1+g)/(0.12-g)*0.7118

(58.88-7.5038)=2.78039*(1+g)/(0.12-g)

(58.88-7.5038)/2.78039 = (1+g)/(0.12-g)

(1+g)/(0.12-g) = 18.48

(1+g)=18.48*(0.12-g)

1+g=2.22-18.48 g

g=(2.22-1)/(1+18.48)

g=6.25%

So, Constant Growth Rate is 6.25%.