Encore is an international is a very successful retailer of casual-wear. Securities analysts speculated that Encore could not keep up the pace of its historical growth. They warned that competition is fierce in the fashion industry and that the firm might encounter little or no growth in the future. They estimated that stockholders also should expect a growth of 2% for 2 years and after that no growth in future dividends. Jordan Ellis, the founder, Scenario 1: believes that the company can maintain a constant annual growth rate in dividends per share of 6% in the future, Scenario 2: possibly 8% for the next 2 years, and then 6% thereafter. Ellis based his estimates on expansion into European and Latin American markets. In preparing the long-term financial plan, Encore's CFO has assigned a junior financial analyst to evaluate the firm's current stock price, asking him to consider the conservative predictions of securities analysts and the aggressive predictions of the company founder, Jordan Ellis. r % is required to solve all the Data item 2015 value below questions Earnings per share (EPS) $6.25 Price per share of common stock $40.00 r=20% Book value of common stock equity $60,000,000 Total common shares outstanding 2,500,000 Common stock dividend per share $4.00 1. What is the firm's current book value per share? 2. What is the firm's current P/E ratio? 3. If the securities analysts are correct and there is no growth in future dividends, what will be the value per share of the Encore stock? 4. If Jordan Ellis's predictions are correct (Scenario 1), what will be the value per share of Encore stock if the firm maintains a constant annual 6% growth rate in future dividends? 5. If Jordan Ellis's predictions are correct (Scenario 2), what will be the value per share of Encore stock if the firm maintains a constant annual 8% growth rate in dividends per share over the next 2 years and 6% thereafter? 6. Compare the current (2015) price of the stock and the stock values found in parts 1, 3, 4, and 5. Discuss why these values may differ. Which valuation method do you believe most clearly represents the true value of the Encore stock