Background:

ABC Corporation does not currently pay cash dividends on their common stock, but they are expected to pay a 65 cent per share cash dividend 5 years from today. The growth rate of the dividends is expected to be 25% per year for the following 10 years (from t = 5 to 15). Thereafter, dividends are expected to shrink at 3% per year forever. The appropriate discount rate given the risk of the stock is E[r] = 9%^EAR_.

Part A:

Determine the size of the cash dividend that is paid 15 years from today. Enter a value with at least 4 digits of precision.

Part B:

Determine the size of the cash dividend that is paid 16 years from today. Enter a value with at least 4 digits of precision.

Part C:

Determine the size of the cash dividend that is paid 20 years from today. Enter a value with at least 4 digits of precision.

Part D:

Determine the fair price of the stock today.

Part E:

What is the fair price of the stock immediately after the dividend is paid at t = 15?

Part F:

What is the fair price of the stock immediately before the dividend is paid at t = 15?