b) You are asked to determine a stock value of a company based on the dividend-discount model (DDM). The company uses a cost of equity of 10.5% and the expected return on new investments is 12%. The payout ratio is 0.69. Their last dividend was 1.24 per share. Analysts estimate that the company's five-year growth rate is 8.67%. i) Calculate the next 5 annual dividends based on the five-year growth rate. (4 marks) ii) Compute the long-term growth rate based on the payout ratio, and use it to determine company's stock price for year five. (4 marks) iii) Find the current stock price based on the dividend-discount model (DDM). (4 marks) iv) You find that on that day the stock of the company was trading at 11.44. Why does your estimate differ from the actual stock price? Would you recommend buying or selling the stock? Explain the limitations of the DDM. What other methods would you use in practice to find whether the stock of the company is mispriced? (8 marks)