Create a spreadsheet that applies the variable-growth model to predict the intrinsic value of the Rhyhorn Company common stock. Assume that dividends will grow at a variable rate for the next three years (2019, 2020, and 2021). After that, the annual rate of growth in dividends is expected to be 7% and stay there for the foreseeable future. Starting with the latest (2018) annual dividend of $2.00 per share, Rhyhorns earnings and dividends are estimated to grow by 18% in 2019, by 14% in 2020, and by 9% in 2021 before dropping to a 7% rate. Given the risk profile of the firm, assume a minimum required rate of return of at least 12%.

A. Calculate the projected annual dividends over the years 2019, 2020, and 2021.

B. Determine the present value of dividends during the initial variable-growth period.

C. What do you believe the price of Rhyhorn stock will be at the end of the initial growth period (2021)?

D. Having determined the expected future price of Rhyhorn stock in part c, discount the price of the stock back to its present value.

E. Determine the total intrinsic value of Rhyhorn stock based on your previous calculations.