Please answer the following questions. You have to show your work to get full credit. 1. Dividends vs Investment and Growth (17 Points). XYZ Corporation has earnings per share (EPS) of $15, a dividend payout rate of 60%, an expected return on investment (ROI) of 20% and an expected equity cost of capital of 25%. (NOTE: You need to show your work in each part of the problem to get full credit!) (a) 7 Points. Given the information above, what is the current stock price of XYZ Corporation? (Assume that dividends are expected to be paid forever) (b) 5 Points. Due to a change in the economic environment, XYZ Corporation now estimates that its expected ROI is now only 5%. If the EPS, the dividend payout rate and equity cost of capital are the same as in part (a), what would be the new stock price of XYZ corporation? (Assume that dividends are to be paid forever). (c) 5 Points. What would be XYZ's stock price if it paid all of its income as dividends? (1.e. dividend payout rate is 100%). (You can choose to calculate the stock price using either part (a) or part (by's ROI)