Discount Model pany expects to grow Problem #4: Stock Valuation using a Dividend Discoun Roadrunner Enterprises is expected to grow its dividends and earnings at various The company just paid a cash dividend of $3.00 per share. The company expects to its dividend at 12% for the next two vears, then at 10% for the following three years afte which the company expects to grow at a constant rate of 8% per year forever. If the required rate of return on Roadrunner's common stock is 15%, then what is the Fair Market Value (FMV) of the stock now? Show a timeline of the cash flows. Show all work. If the stock now trades at $50.00 per share, is it rich or cheap