Beasley Ball Bearings paid a dividend of $$4$ last year. The dividend is expected to grow at a constant rate of $6$ percent over the next four years. The required rate of return is $16$ percent $($this will also serve as the discount rate in this problem$).$ Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Beasley Ball Bearings paid a dividend of $$4$ last y

a$.$ Compute the anticipated value of the dividends for the next four years. $($Do not round intermediate calculations. Round your final answers to $2$ decimal places.$)$

Anticipated Value

D$1$ $

D$2$ $

D$3$ $

D$4$ $

b$.$ Calculate the present value of each of the anticipated dividends at a discount rate of $16$ percent. $($Do not round intermediate calculations. Round your final answers to $2$ decimal places.$)$

PV of Dividends

D$1$ $

D$2$

D$3$

D$4$

Total $

c$.$ Compute the price of the stock at the end of the fourth year $($P$4).($Do not round intermediate calculations. Round your final answer to $2$ decimal places.$)$

Stock price at Year $4$ $ $=$

d$.$ Calculate the present value of the year $4$ stock price at a discount rate of $16$ percent. $($Do not round intermediate calculations. Round your final answer to $2$ decimal places.$)$

Present value of Year $4$ stock price $

e$.$ Compute the current value of the stock. $($Do not round intermediate calculations. Round your final answer to $2$ decimal places.$)$

Current value $ $=$

f$.$ Use the formula given below to show that it will provide approximately the same answer as part e$.($Do not round intermediate calculations. Round your final answer to $2$ decimal places.$)$

P$0$

$=$

D$1$

Ke $?$ g

Current value $

g$.$ If current EPS were equal to $5\mathrm{.}70$ and the P$/$E ratio is $1\mathrm{.}2$ times higher than the industry average of $7,$ what would the stock price be$?($Do not round intermediate calculations. Round your final answer to $2$ decimal places.$)$

Stock price $

h$.$

By what dollar amount is the stock price in part g different from the stock price in part f$?($Do not round intermediate calculations. Round your final answer to $2$ decimal places.$)$

Amount $

i$.$ In regard to the stock price in part f$,$ indicate which direction it would move if:

$(1)$ D$1$ increases $($Click to select$)$Stock price increasesStock price decreases

$(2)$ Ke increases $($Click to select$)$Stock price decreasesStock price increases

$(3)$ g increases $($Click to select$)$Stock price increasesStock price decreases