3. (15 points) You are evaluating the potential purchase of a XYZ stock. The company is currently earning $8.00 per share and has plowback ratio of 40%. Based on a review of similar-risk investment opportunities, you must earn a 16 percent rate of return on the proposed purchase. Because you are relatively uncertain about future cash flows, you decide to estimate the firm's value using several possible cash flow, growth rate assumptions. a. What is the firm's value if dividends are expected to grow at an annual rate of o percent to infinity? b. What is the firm's value if dividends are expected to grow at a constant annual rate to infinity given an ROE of 16% and plowback ratio of 40%? c. What is the firm's value if dividends are expected to grow at an annual rate of 25 percent for the first 3 years followed by a constant annual rate of 9 percent in years 4 to infinity