Please answer all parts

1. XYZ Inc. has expected earnings over the next year of $2/share (E1 = 2). The company is expected to maintain an earnings retention rate of 40%, i.e., 60% of earnings are expected to be paid out as dividends every year. The company has a beta of 1.5, the risk-free rate is 4%, and the market risk premium is also 4%. a. If the growth rate in earnings is expected to be 5% in perpetuity i. What is the value of the stock? ii. What is the expected price a year from now? iii. What is the expected holding period return over the next year? How much of this return is due to capital gains (price appreciation = P1/Po-1) and how much is attributable to dividend yield (D1/Po)? iv. What ROE justifies this growth rate? V. What is the present value of growth opportunities for this stock? 1. XYZ Inc. has expected earnings over the next year of $2/share (E1 = 2). The company is expected to maintain an earnings retention rate of 40%, i.e., 60% of earnings are expected to be paid out as dividends every year. The company has a beta of 1.5, the risk-free rate is 4%, and the market risk premium is also 4%. a. If the growth rate in earnings is expected to be 5% in perpetuity i. What is the value of the stock? ii. What is the expected price a year from now? iii. What is the expected holding period return over the next year? How much of this return is due to capital gains (price appreciation = P1/Po-1) and how much is attributable to dividend yield (D1/Po)? iv. What ROE justifies this growth rate? V. What is the present value of growth opportunities for this stock