As companies evolve, certain factors can drive sudden growth. This may lead to a period of nonconstant, or variable, growth. This would cause the expected growth rate to increase or decrense, thereby affecting the valuation model. For companies in such situations, you would refer to the variable, or nonconstant, growth model for the valuation of the company's stock. Consider the case of Portman Industries: Portman Industries just paid a dividend of $2.40 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 20.00% over the next yeac. After the next year, though, Portman's dividend is expected to grow at a constant rate of 4,00% per year. (Note: Do not round your intermediate calculations.) The risk-free rate (fru) is 5.00%, the market risk premium (RPM) is 6,00%, and Portman's beta is 1.30 . Assuming that the markat is in equilibrium, use the information fust grven to comptete the table. What is the expected dividend yleid for Portman's stock today? 7.04% 9348 8.46% 8,80% Now let's apply the results of your calculations to the following situation: Portman has 500,000 shares outstanding, and Judy Davis, an investor, hold5 7,500- shares at the current price (computed above). Suppose Portman is considering issuing 62,500 new shares at a price of $27,82 per share. If the new shares are sold to outside investors, by how much will Judy's. investmenk in Portman Industries be diluted on a per-share basis? \$1.16 per share \$0.47 per share 30.55 per share s0.68 per shane Thus, Juors investment will be diluted, and Judy will expenience a total of