D FIN 360-Exam 2-DUE-10 FIN 360_Exam 2 DUE 10-14-2017.pdf 4. Agarwal Technologies was founded 10 years ago. It has been profitable for the last 5 years, but it has needed all of its earnings to support growth and thus has never paid a dividend. Management has indicated that it plans to pay a S0.25 dividend 3 y rate for 2 years, and then to increase it at a constant rate of 8.00% thereafter. Management's forecast of the future dividend stream, along with the forecasted growth rates, is shown below. Assuming a required return of 1 1 .00%, what is your estimate of the stock's current value? s from today, then to increase it at a relatively rapid Year Growth rate Dividends 6 8.00% $0.000 $0.000 SO.000$0.250S0.325 $0.374S0.404 4 30.00% NA NA NA NA 15.00% 5. Carson Inc.'s manager believes that economic conditions during the next year will be strong, normal, or weak, and she thinks that the firm's returns will have the probability distribution shown below. What's the standard deviation of the estimated returns? (Hint: Use the formula for the standard deviation of a population, not a sample) Do not round your intermediate calculations. Economic Conditions Strong Normal Weak rO 30% 40% 30% Return 40.0% 10.0% -16.0% 14/10/2017