Crazy Inc. just paid a dividend of $7. They will decrease the dividend by $1 per year until it reaches $3. At which point they will maintain a plow back rate of 40% with an expected ROE of 20%. Currently, CAPM model indicates that Crazys beta is 1.5 and the risk free rate is 5% and the market return is 14%. Also assume that the required rate or return will drop by 1% six years from now and remain at the new value forever.

Assuming you purchase the stock today and sell it in 1 year, calculate the following:

CGY

DY

HPR