Chiptech, Inc., is an established computer chip firm with several profitable existing products as well as some promising new products in development. The company earned exist1 per share last year and just paid out a dividend of exist.50 per share. Investors believe the company plans to maintain its dividend payout ratio at 50%. ROE equals 20%. Everyone in the market expects this situation to persist indefinitely. a. What is the market price of Chiptech stock? The required return for the computer chip industry is 15%, and the company has just gone ex-dividend (i.e., the next dividend will be paid a year from now, at t = 1). (Round your answer to 2 decimal places.) b. Suppose you discover that Chiptechs competitor has developed a new chip that will eliminate Chiptechs current technological advantage in this market. This new product, which will be ready to come to the market in two years, will force Chiptech to reduce the prices of its chips to remain competitive. This will decrease ROE to 15%, and, because of falling demand for its product, Chiptech will decrease the plowback ratio to 40. The plowback ratio will be decreased at the end of the second year, at t = 2: The annual year-end dividend for the second year (paid at t = 2) will be 60% of that t years earnings. What is your estimate of Chiptechs intrinsic value per share? (Round your answer to 2 decimal places.) No one else in the market perceives the threat to Chiptechs market. In fact, you are confident that no one else will become aware of the change in Chiptechs competitive status until the competitor firm publicly announces its discovery near the end of year 2. c. What will be the rate of return on Chiptech stock in the coming year (i.e., between t = 0 and t = 1)? (Do not round intermediate calculations. Round your answer to 2 decimal places.) What will be the rate of return on Chiptech stock in the second year (i.e., between t = 1 and t = 2)? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) What will be the rate of return on Chiptech stock in the third year (i.e., between t = 2 and t = 3)? (Do not round intermediate calculations. Round your answer to 2 decimal places.)