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)