A small firm currently pays no dividends. You overhear the CFO tell the CEO that the plan is to begin paying dividends in 2 years. The first dividend will be 3.55. Dividends are expected to grow at 7.5% for the following two years. The first dividend will be 3.55. Dividends are expected to grow at 7.5% for the following two years and then 2% thereafter, forever. Given the required return of 12% (discount rate), what would you pay for the stock today?

a. What is the second dividend the company pays?

b. What is the present value of the second dividend the company pays?

c. What is the value of the stock if you calculated it using the Present value of the future dividend payment?

Please show work in excel