c. Compute the price of the stock at the end of the third year (P₃). (Round "PV Factor" to 3 decimal places. Round intermediate calculations to 2 decimal places. Round the final answer to 2 decimal places.)

P3	=	D4
		Ke g

(D₄ is equal to D₃ times 1.08)

Price of the stock $ 136.04

d. Calculate the present value of the year 3 stock price at a discount rate of 14 percent. (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 3 decimal places.)

Price of the stock (discounted) $

e. Compute the current value of the stock. (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Current value $

f. Use formula given below to show that it will provide approximately the same answer as part e. (Round the final answer to 2 decimal places.)

P0	=	D1
		Ke g

For formula 108, use D₁ = $6.48, K_e = 14 percent, and g = 8 percent. (The slight difference between the answers to parts e and f is due to rounding.)

Current value $