4. Richard Sharpe expects Hawkeswill Enterprises to earn $10 per share next year, and this company will start paying out 50% of the earnings per share (EPS) in dividend. He expects the earnings to grow at 10% per year during the following two years, then 5% per year for another three years. After that, the earnings will grow at 1% for the foreseeable future. If the discount rate for Hawkeswill is 8% (EAR), how much will Sharpe pay for a share? 5. A stock currently sells for $90 and has just paid $3 in dividends (the check was mailed out yesterday). If the next dividend is expected in one year and investors expect that the dividend will grow at a constant rate indefinitely. What is the growth rate? Suppose the discount rate is 10% (EAR). 6. A financial analyst tries to estimate the stock price of Precision Inc. Precision just announced its earnings per share of $3 today, but the company currently pays no dividends. The analyst expects Precision's earnings to grow at 22% per year in the following five years. After that, the earnings will grow at 5% per year for five years and then slow down to 2% forever. Precision plans to pay out its first annual dividend in 4 years by distributing 50% of its earnings to shareholders, and the company does not plan to change its payout policy in the foreseeable future. How much is the price of a share of Precision if the discount rate is 12% (EAR)