Company Qs current return on equity (ROE) is 15%. It pays out 55 percent of earnings as cash dividends (payout ratio = 0.55). Current book value per share is $66. Book value per share will grow as Q reinvests earnings.

Assume that the ROE and payout ratio stay constant for the next four years. After that, competition forces ROE down to 12.0% and the payout ratio increases to 0.80. The cost of equity is 12.0%.

1. What are Qs EPS and dividends in years 1, 2, 3, 4, and 5?
2. What is Qs stock worth per share?