I only need the answer to D) questions are provided for reference XYZ Corporation has total earnings of $500 Million which are projected to remain constant XYZ also has total shares outstanding of 300 million The corporation intends to distribute dividends to its shareholders according to the following schedule Period 1 Give a dividend payout rate of 40 Period 2 Give a dividend payout rate of 100 Period 3 until forever Give a dividend payout rate of 70 Dividends are also projected to grow at a rate of 4 every year forever (a) Find the price of XYZ corporations stock in period 2 (call it P2) Given P2 write down the formula that would determine the (per share) price of XYZs stock today (P0) Assume equity cost of capital is 8 (NOTE You have to plug in all relevant information into the formula for full credit) (b) What is the expected total return from this stock Assume, you will sell the stock at the end of period 2 (NOTE To get full credit you need to write down the expression that would calculate the total return) (c) Suppose that in Period 3, XYZ also intends to start buying back some of its shares outstanding and it intends to spend 20 of its earnings to do so According to the total payout model, what would be the stock price of XYZ Corporation in period 2 (d) As of April 6th, 2020 one share of Microsofts stock traded at $165 On the other hand, one share of stock by Berkshire Hathaway traded at $277,000 Provide one reasons that might explain the large difference in the stock price between these corporations

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I only need the answer to D) questions are provided for reference . XYZ Corporation has total earnings of $500 Million which are projected to

I only need the answer to D)

questions are provided for reference

. XYZ Corporation has total earnings of $500 Million which are projected to remain constant. XYZ also has total shares outstanding of 300 million. The corporation intends to distribute dividends to its shareholders according to the following schedule: Period 1: Give a dividend payout rate of 40%

Period 2: Give a dividend payout rate of 100%.

Period 3 until forever: Give a dividend payout rate of 70%. Dividends are also projected to grow at a rate of 4% every year forever.

(a) . Find the price of XYZ corporations stock in period 2 (call it P2). Given P2 write down the formula that would determine the (per share) price of XYZs stock today (P0). Assume equity cost of capital is 8%. (NOTE: You have to plug in all relevant information into the formula for full credit).
(b) . What is the expected total return from this stock? Assume, you will sell the stock at the end of period 2. (NOTE: To get full credit you need to write down the expression that would calculate the total return)
(c) . Suppose that in Period 3, XYZ also intends to start buying back some of its shares outstanding and it intends to spend 20% of its earnings to do so. According to the total payout model, what would be the stock price of XYZ Corporation in period 2?
(d) As of April 6th, 2020 one share of Microsofts stock traded at $165. On the other hand, one share of stock by Berkshire Hathaway traded at $277,000. Provide one reasons that might explain the large difference in the stock price between these corporations.