HP Co. paid $2 dividend last year. The dividend is expected to grow at a constant rate of 5 % over the next 3 years. The required rate of return is 12% (this will also serve as the discount rate in this problem). a. Compute the anticipated value of the dividends for the next 3 years. That is, compute D1, D2 and D3. b. Discount each of these dividends back to the present at a discount rate of 12% and then sum them. c. Compute the price of the stock at the end of the third year (P3) d. After you have computed P3, discount it back to the present at a discount rate of 12% for 3 years e. Add together the answers in part b and part d to get P0, the current value of the stock. This answer represent value of the first 3 periods of dividends, plus the present value of the price of the stock after 3 periods (which, in turn, represents the value of all future dividends). f. Use formular 10-9 Po = D1/ (Ke -g) Compare the answer with part (e)