Company XYZ paid the following dividends from year 1 to year 5:

1.50 1.58 1.58 1.58 1.66

(Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Show work.

a) Find dividend average growth

b) Find the value of the stock assuming that: company will pay a constant dividend of 1.66 and that you require 15% return on the stock.

c) Find the value of the stock assuming you require 15% return on the stock and assuming the dividend will grow at the rate you calculated in (a) (use constant growth model).

d) Based on $75.58 closing price today and the values you calculated in part (b) or (c), should you purchase the stock at its current market price? Why or why not? Will you earn the 15% return?

e) What is the return you would earn if you purchase the stock at $75.58? Use the growth rate in dividends you calculated in (a).