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Hello, I need assistance with part D Integrated Potato Chips just paid a $3.0 per share dividend. You expect the dividend to grow steadily at
Hello,
I need assistance with part D
Integrated Potato Chips just paid a $3.0 per share dividend. You expect the dividend to grow steadily at a rate of 6% per year. a. What is the expected dividend in each of the next 3 years? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Answer is complete and correct. Expected Dividend Year $ 3.18 1 3.37 Year 2 Year 3 3.57 b. If the discount rate for the stock is 10%, at what price will the stock sell today? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete and correct. Current price $ 79.50 c. What is the expected stock price 3 years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete and correct. Future price $ 94.68 d. If you buy the stock and plan to sell it 3 years from now, what are your expected cash flows in (i) year 1; (ii) year 2; (iii) year 3? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Answer is complete but not entirely correct. Year 1 Year 2 Year 3 $ 3.18 $ 3.37 $ 3.57 Dividend Sale of stock Total cash flow 79.66 $ 3.18 $ 3.37 $ 83.23Step by Step Solution
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