1) (20%) John owns 1,000 shares of ABC company stock. He expects to receive a total of $2 in dividend/share next year (D1) with a growth rate of 5% a year in dividend. The market discount rate (r) is 12%. (Note: Rou up answers in 2 decimal points) (a) If John wants to sell the stock at the end of year 4, what is the price he can sell (P4)? (b) What is the intrinsic value of the stock [E(Po)] if John plans to sell the stock at year 4? (Use CFs & Ps to calculate) (c) What is the intrinsic value of the stock [E(Po)] if John plans to sell the stock at year 4? (Use DDM constant formula to calculate) hat should John do if the market price (Po) is now selling at $30? Why? (e) What is the rate of return (%) of John if he buys the stock at [E(P.)] in (b) and sells it at Po (price in (d))? 1) (20%) John owns 1,000 shares of ABC company stock. He expects to receive a total of $2 in dividend/share next year (D1) with a growth rate of 5% a year in dividend. The market discount rate (r) is 12%. (Note: Rou up answers in 2 decimal points) (a) If John wants to sell the stock at the end of year 4, what is the price he can sell (P4)? (b) What is the intrinsic value of the stock [E(Po)] if John plans to sell the stock at year 4? (Use CFs & Ps to calculate) (c) What is the intrinsic value of the stock [E(Po)] if John plans to sell the stock at year 4? (Use DDM constant formula to calculate) hat should John do if the market price (Po) is now selling at $30? Why? (e) What is the rate of return (%) of John if he buys the stock at [E(P.)] in (b) and sells it at Po (price in (d))