Integrated Potato Chips paid a $2.70 per share dividend yesterday. You expect the dividend to grow steadily at a rate of 8.50% per year forever.

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.)

	Expected Dividend
Year 1	$
Year 2
Year 3

b.	If the discount rate for the stock is 16.00%, at what price will the stock sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Current price

$

c.	What is the expected stock price 3 years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Future price

$

d.	If you buy the stock and plan to hold it for 3 years, what payments will you receive? What is the present value of those payments? (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places.)

	Year 1	Year 2	Year 3
DIV	$	$	$
Selling price
Total cash flow
PV of cash flow
sum of the PV's $

2.

Waterworks has a dividend yield of 16.59%. If its dividend is expected to grow at a constant rate of 12.35%, what must be the expected rate of return on the companys stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Expected rate of return

%