Chapman, Inc.'s Mexican subsidiary, V. Gomez Corporation, is expected to pay to Chapman 20 pesos in dividends in 1 year after all foreign and U.S. taxes have been subtracted. The exchange rate in 1 year is expected to be $0.10 per peso. After this, the peso is expected to depreciate against the dollar at a rate of 5% a year forever due to the different inflation rates in the United States and Mexico. The peso-denominated dividend is expected to grow at a rate of 6% a year indefinitely. Chapman owns 15 million shares of V. Gomez. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. X Open spreadsheet What is the present value of the dividend stream, in dollars, assuming V. Gomez's cost of equity is 14%? Do not round intermediate calculations. Round your answer to the nearest dollar. $ A 1-year forward exchange rate, U.S. dollars 4 required to buy 1 peso 5 Annual depreciation rate of peso against dollar Peso-denominated dividend annual growth rate 6 7 Number of common shares owned Cost of equity, rs 8 9 10 11 12 Step 1: Convert Pesos to Dollars Year 1 dividends in dollars, D Step 2: Find the Growth Rate in Dollar-Denominated Divdiends: 13 14 Growth in exchange rate 15 16 22 23 24 25 26 Growth rate in dollar-denominated dividends 17 18 Po 19 G Step 3: Calculate the Per-Share Stock Price in Dollars: 20 21 Value of equity investment, in dollars Step 4: Calculate the Dollar Value of the Equity Investment: B $0.10 5.00% 6.00% 15,000,000 14.00% Formulas #N/A #N/A #N/A #N/A #N/A D