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Norman Osborn, the founder of Oscorp, had a vision of creating a corporation which steadily grows its dividend at 5.5% perpetually. Analysts expect Oscorp to

Norman Osborn, the founder of Oscorp, had a vision of creating a corporation which steadily grows its dividend at 5.5% perpetually. Analysts expect Oscorp to pay a $4.20 dividend a year from today. The required rate of return from Oscorp shares is 14%.

a. Calculate the stock price of Oscorp.

b. Norman Osborn has been informed by his scientists that they are close to reaching a breakthrough in robotics which will double their annual growth rates in the future. If their dividend grows at the current rate (5.5%) for the next three years (i.e., years 2-4) and the new growth rate is applicable after that, what will be the new stock price of Oscorp? (Note: Oscorps next year dividend is $4.20 and the required rate of return is 14%)

c. Norman Osborn changes his mind about the firms perpetual dividend payment system. He wants to implement a plan which includes 15 years of dividend payments growing at a certain rate and no dividends afterwards. Furthermore, Norman Osborn does not want the stock price of Oscorp to be affected by this dividend policy change. The Oscorp stocks will pay a $5.10 dividend a year from today and the Oscorp stocks are currently priced at 5.5% (perpetual) growth rate. If the required rate of return is still 14%, how much annual growth during the 15 years of dividend payments should Harry aim for to successfully implement his dividend policy change? (Hint: It will be easier to solve this problem with excel)

Would it be possible to solve all these questions on excel, if so can you please show me how it would be done if not the manual version would also be good to Thanks!

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