a) On December 31, 2002, the share of Amacon Inc. closed at $20. The company subsequently paid a year-end dividend in each of the years 2003 through 2007 as follows: 2003 $1.00 2004 $1.00 2005 $1.00 2006 $1.25 2007 $1.25 Suppose you had purchased a share of Amacon stock on Dec 31, 2002. Calculate the price at which you must sell your share at 2007 year-end in order to realize an annual compounded total rate of return of 10 percent on your initial investment (before commission and taxes). (15 marks) b) Calculate the price for a stock given that the beta of the stock is 1.32, the risk-free rate is 6% per year, and the expected rate of return on the market portfolio is 14% per year. The current dividend is $4.34 per share, dividends are expected to grow at a rate of 2% during year 1, dividends are expected to grow at a rate of 8% during year 2, dividends are expected to grow at a rate of 16% during year 3, dividends are expected to grow at a rate of 15% during year 4, and dividends are expected to grow at a rate of 3% per year from that point on. (10 marks)