Assume that you own shares of company "ALPHA". The current price is 49.84 per share, while last week it paid a dividend of 1.67. Consider whether you should sell your shares or increase the number of "ALPHA" shares you hold. Based on the estimates for future dividends you will evaluate the following scenarios:

Scenario 1: Dividends will increase over the next three years at a rate of 30%, 28% and 24% respectively. After three years, the dividend growth rate is expected to stabilize at 8% per year.

Scenario 2: The annual dividend will remain constant ( 1.67) for all years.

The return you require for shares in this risk category is 14%. Consider the following:

i. If scenario 1 applies, estimate the value of the "ALPHA" share today. What should be your investment decision regarding "ALPHA" shares? Justify your answer.

ii. If the 2nd scenario applies, estimate the value of the "ALPHA" share today. What should be your investment decision regarding "ALPHA" shares? Justify your answer.

iii. Using the forecasts of the 1st scenario calculate the share price of "ALPHA" in the 2nd year (P2)