Mauri Micro Chips (MMC) is an established computer chip firm with several profitable existing products as well as some promising new products. MMC earned $1 a share last year and just paid out a dividend of $0.50 per share. Investors believe the company plans to maintain its dividend payout ratio of 50%. ROE is 20%. Everyone in the market expects this situation to persist indefinitely. (a) The required return for the computer chip industry is 15% and the company has just gone ex- dividend (the next dividend will be paid a year from now, at t=1). (b) Suppose you discover that MMC's competitor has developed a new chip that will eliminate MMC's current technological advantage in this market. This new product, which will be ready to come to the market in 2 years, will force MMC to reduce the prices of its chips to remain competitive. This will decrease ROE to 15% and, because of falling demand for its product. MMC will decrease its plowback ratio to 0.40. The plowback ratio will be decreased at the end of the second year, at t=2: the annual year-end dividend for the second year (paid at t=2) will be 60%% of that year's earnings. (c) No one else in the market perceives the threat to MMC's market. In fact, you are confident that no one else will become aware of the change in MMC's competitive status until the competitor firm publicly announces its discovery near the end of year 2. What will be the rate of return on MMC's shares in the coming year (ie between t=0 and t=1)? In the second year (between t=1 and t=2)? In the third year (between t=2 and t=3)? 15.09%, -20.06, 15.0% 15.0%, -18.06, 15.0% 15.0%, -16.096, 15.0% 12.0%, -20.096, 12.0% None of the above