(D4 is equal to D3 times 1.05) Price of the stock $ d. Calculate the present value of the year 3 stock price at a discount rate of 12 percent. (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 3 decimal places.) Price of the stock (discounted) $ e. Compute the current value of the stock. (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 2 decimal places.) Current value $ f. Use formula given below to show that it will provide approximately the same answer as part e. (Round the final answer to 2 decimal places.) PO = D1 Ke-9 g For formula 10-8, use D = $2.10, Ke 12 percent, and g = 5 percent. (The slight difference between the answers to parts e and fis due to rounding.) Current value $ EA = Activate Windows U-100 30 0.742 0.552 0.412 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.044 40 0.672 0.453 0.307 0.208 0.142 0.097 0.067 0.046 0.032 0.022 0.015 50 0.608 0.372 0.228 0.141 0.087 0.054 0.034 0.021 0.013 0.009 0.005 Percent Period 12% 13% 14% 15% 16% 17% 18% 19% 20% 25% 30% 35% 40% 50% 1. 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.800 0.769 0.741 0.714 0.667 2. 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0.694 0.640 0.592 0.549 0.510 0.444 3. 0.712 0.693 0.675 0.658 0.641 0.624 0.609 0.593 0.579 0.512 0.455 0.406 0.364 0.296 4. 0.636 0.613 0.592 0.572 0.552 0.534 0.515 0.499 0.482 0.410 0.350 0.301 0.260 0.198 5. 0.567 0.543 0.519 0.497 0.476 0.456 0.437 0.419 0.402 0.320 0.269 0.223 0.186 0.132 6. 0.507 0.480 0.456 0.432 0.410 0.390 0.370 0.352 0.335 0.262 0.207 0.165 0.133 0.088 7. 0.452 0.425 0.400 0.376 0.354 0.333 0.314 0.296 0.279 0.210 0.159 0.122 0.095 0.059 8. 0.404 0.376 0.351 0.327 0.305 0.285 0.266 0.249 0.233 0.168 0.123 0.091 0.068 0.039 9. 0.361 0.333 0.300 0.284 0.263 0.243 0.225 0.209 0.194 0.134 0.094 0.048 0.067 0.026 10 0.322 0.295 0.270 0.247 0.227 0.208 0.176 0.191 0.162 0.107 0.073 0.050 0.035 0.017 11 0.287 0.261 0.237 0.215 0.195 0.178 0.162 0.148 0.135 0.086 0.056 0.037 0.025 0.012 12 0.257 0.231 0.208 0.187 0.168 0.152 0.137 0.124 0.112 0.069 0.043 0.027 0.018 0.008 13 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.104 0.093 0.055 0.033 0.020 0.013 0.005 14 0.205 0.181 0.160 0.141 0.125 0.111 0.099 0.088 0.078 0.044 0.025 0.015 0.009 0.003 15 0.183 0.160 0.140 0.123 0.108 0.095 0.084 0.074 0.065 0.035 0.020 0.011 0.006 0.002 16 0.163 0.141 0.123 0.107 0.093 0.081 0.071 0.062 0.054 0.028 0.015 0.008 0.005 0.002 17 0.146 0.125 0.108 0.093 0.080 0.069 0.060 0.052 0.045 0.023 0.012 0.006 0.003 0.001 18 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.044 0.038 0.018 0.009 0.005 0.002 0.001 19. 0.116 0.098 0.083 0.070 0.060 0.051 0.043 0.037 0.031 0.014 0.007 0.003 0.002 0 20. 0.104 0.087 0.073 0.051 0.061 0.043 0.037 0.031 0.026 0.012 0.005 0.002 0.001 ate Vindo 25. 0.059 0.047 0.038 0.030 0.024 0.020 0.016 0.013 0.010 0.004 0.001 0.001 0 to Settings to act 30. 0.033 0.026 0.020 0.015 0.012 0.009 0.007 0.005 0.004 0.001 0 0 0 0 0.009 2009 2001 b. Calculate the present value of each of the anticipated dividends at a discount rate of 12 percent. (Round "PV Factor" to 3 decimal places. Round intermediate calculations to 3 decimal places. Round the final answers to 3 decimal places.) D1 228 D2 D3 PV of dividends $ Total $ c. Compute the price of the stock at the end of the third year (P3). (Round "PV Factor" to 3 decimal places. Round intermediate calculations to 2 decimal places. Round the final answer to 2 decimal places.) P3 D4 Ke-g (D4 is equal to D3 times 1.05) Price of the stock $ d. Calculate the present value of the year 3 stock price at a discount rate of 12 percent. (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 3 decimal places.) APPENDIX B = FV [+] = FV(1 + i)- Present Value of $1, PVF PV= Percent Period 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12345 1. 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 2. 0.980 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.842 0.826 0.812 3. 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 4. 0.961 0.924 0.885 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 5. 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 6. 0.942 0.888 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 7 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 8. 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 9 0.914 0.837 0.766 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 10 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.352 11 0.896 0.804 0.722 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.317 12 0.887 0.788 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.286 13 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.258 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.232 15 0.861 0.743 0.642 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.209 16 0.853 0.728 0.623 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.188 17 0.844 0.714 0.605 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.170 18 0.836 0.700 0.587 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.153 19. 0.828 0.686 0.570 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.138 20 0.820 0.673 0.554 0.456 0.377 0.312 0.258 0.215 0.178 0.149 0.124 25. 0.780 0.610 0.478 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.074 ivate Windows 30. 0.742 0.552 0.412 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.044 Settings to activate 40. 0.672 0.453 0.307 0.208 0.142 0.097 0.067 0.046 0.032 0.022 0.015 Hunter Petroleum Corporation paid a $2 dividend last year. The dividend is expected to grow at a constant rate of 5 percent forever. The required rate of return is 12 percent (this will also serve as the discount rate in this problem). Use Appendix B a. Compute the anticipated value of the dividends for the next three years. (Do not round intermediate calculations. Round the final answer to 3 decimal places.) Anticipated value $ D1 222 D2 D3 $ ta ta ta $ b. Calculate the present value of each of the anticipated dividends at a discount rate of 12 percent. (Round "PV Factor" to 3 decimal places. Round intermediate calculations to 3 decimal places. Round the final answers to 3 decimal places.) PV of dividends $ D1 222 D2 03 $ Total Activate Windows U.TUJ V.TAU 3 0.712 0.693 0.675 0.658 0.641 0.624 0.609 0.593 0.579 0.512 0.455 0.406 0.364 0.296 45 0.636 0.613 0.592 0.572 0.552 0.534 0.515 0.499 0.482 0.410 0.350 0.301 0.260 0.198 5. 0.567 0.543 0.519 0.497 0.476 0.456 0.437 0.419 0.402 0.320 0.269 0.223 0.186 0.132 6. 0.507 0.480 0.456 0.432 0.410 0.390 0.370 0.352 0.335 0.262 0.207 0.165 0.133 0.088 7. 0.452 0.425 0.400 0.376 0.354 0.333 0.314 0.296 0.279 0.210 0.159 0.122 0.095 0.059 8. 0.404 0.376 0.351 0.327 0.305 0.285 0.266 0.249 0.233 0.168 0.123 0.091 0.068 0.039 9. 0.361 0.333 0.300 0.284 0.263 0.243 0.225 0.209 0.194 0.134 0.067 0.094 0.048 0.026 10. 0.322 0.295 0.270 0.247 0.227 0.208 0.191 0.176 0.162 0.073 0.107 0.050 0.035 0.017 11 0.287 0.261 0.237 0.215 0.195 0.178 0.162 0.148 0.135 0.086 0.056 0.037 0.025 0.012 12 0.257 0.231 0.208 0.187 0.168 0.152 0.137 13. 0.229 0.204 0.182 0.163 0.145 0.130 0.116 14 0.205 0.181 0.160 0.141 0.125 0.111 0.099 0.088 0.112 0.124 0.093 0.104 0.078 15. 0.183 0.160 0.140 0.123 0.108 0.095 0.084 0.074 0.065 0.035 0.020 0.011 16. 0.163 0.141 0.123 0.093 0.107 0.081 0.071 0.062 0.054 0.028 0.015 0.008 17 0.146 0.125 0.108 0.093 0.080 0.069 0.052 0.060 0.045 0.023 0.012 0.006 0.069 0.043 0.027 0.018 0.033 0.020 0.013 0.005 0.055 0.044 0.025 0.015 0.009 0.003 0.006 0.002 0.005 0.003 0.001 0.008 0.002 18. 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.044 0.038 0.018 0.009 0.005 0.002 0.001 19. 0.116 0.098 0.083 0.070 0.060 0.051 0.043 0.037 0.031 0.014 0.007 0.003 0.002 0 20. 0.104 0.087 0.073 0.061 0.051 0.043 0.037 0.031 0.026 0.012 0.005 0.002 0.001 0 25 0.059 0.047 0.038 0.030 0.024 0.020 0.016 0.013 0.010 0.004 0.001 0.001 0 0 30 0.033 0.026 0.020 0.015 0.012 0.009 0.007 0.005 0.004 0.001 0 0 0 0 40 0.011 0.008 0.005 0.004 0.003 0.002 0.001 0.001 0.001 50 0.003 0.002 0.001 0.001 0.001 0 0 0 0 00 0 0 0 0 0 0 0 0 Excel Spreadsheet Note: Factor calculation with calculator. Set FV =1 Set PMT 0 Select N = number of required periods =required Interest rate Select VY COMP PV = ? PV (. n. 0, FV, 0) = Decimal or % 1=For beginning of period (5th spot) Activate Windows Go to Settings to activate Windows.