Bank of Montreal (BMO), a Canadian company, just release their annual financial statement. The analyst are expecting that BMOs earnings and dividends will continue to grow at 16 % for the next period. After that, growth will level of at 5 % for the indefinite future. Last years dividend was $2 per share and analysts figure that the required return on this stock should be 16 %. a. What is the value of BMOs share assuming that growth at the rate of 16 % will continue for seven years? b. What is the value of BMO share assuming that growth will drop immediately to the longrun rate of 5 %? c. Suppose that BMO is currently trading at $50 per share. How many years of growth at 16 % is the market predicting? How could you use your answer to decide whether to buy BMO shares?