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Hunter Petroleum Corporation paid a $2 dividend last year. The dividend is expected to grow at a constant rate of 5 percent forever. The required rate of return is 12 percent (this will also serve as the discount rate in this problem). Use Arpendix B. a. Compute the anticipated value of the dividends for the next three years. (Do not round intermediate calculations. Round the final answer to 3 decimal places.) Anticipated value Di D2 Dj $ $ $ b. Calculate the present value of each of the anticipated dividends at a discount rate of 12 percent. (Round "PV Factor" to 3 decimal places. Round intermediate calculations to 3 decimal places. Round the final answers to 3 decimal places.) PV of dividends Di D2 D Total $ b. Calculate the present value of each of the anticipated dividends at a discount rate of 12 percent. (Round "PV Factor" to 3 decimal places. Round intermediate calculations to 3 decimal places. Round the final answers to 3 decimal places.) PV of dividends $ Di D2 D3 Total $ c. Compute the price of the stock at the end of the third year (P3). (Round "PV Factor" to 3 decimal places. Round intermediate calculations to 2 decimal places. Round the final answer to 2 decimal places.) P3- D4 Ke-9 D is equal to D, times 105) Price of the stock d. Calculate the present value of the year 3 stock price at a discount rate of 12 percent (Round "PV Foctor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 3 decimal places.) ovate Windows c.Compute the price of the stock at the end of the third year (P3). (Round "PV Factor" to 3 decimal places. Round intermediate calculations to 2 decimal places. Round the final answer to 2 decimal places.) P3 04 Ke-9 (D is equal to Dg times 1.05) Price of the stock $ d. Calculate the present value of the year 3 stock price at a discount rate of 12 percent. (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 3 decimal places.) Price of the stock (discounted) e. Compute the current value of the stock (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 2 decimal places.) Current value f. Use formula given below to show that it will provide approximately the same answer as part e (Round the final answer to 2 decimal places.) Po - D1 Ke-9 Price of the stock d. Calculate the present value of the year 3 stock price at a discount rate of 12 percent. (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 3 decimal places.) Price of the stock (discounted) e. Compute the current value of the stock. (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 2 decimal places.) Current value f. Use formula given below to show that it will provide approximately the same answer as part e. (Round the final answer to 2 decimal places.) D Pe Ke-9 For formula 10-8, use Du = $2.10. Ke -12 percent, and g5 percent. (The slight difference between the answers to parts e and is due to rounding.) Current value APPENDIX B Present Value of $1, PV, PV = FV0.-) - F/(1+6)- Period 2. 5 6. 8. 10...... 11 12 13.... 14. 15 16.. 17 18 19 20 25 30 1% 0.990 0.900 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.780 0.742 0.6772 2% 0.980 0.961 0.942 0.924 0.906 0.8BB 0.871 0.853 0.837 0.820 0.804 0.788 0.773 0.758 0.743 0.728 0.714 0.700 0.686 0.673 0.610 0.552 0493 3% 0.971 0.943 0.915 0.885 0.863 0.837 0.813 0.789 0.766 0.744 0.722 0.701 0.681 0.661 0.642 0.623 0.605 0.587 0.570 0.554 0.478 0.412 0207 49 0.962 0.925 0.889 0.855 0.822 0.790 0.760 0.731 0.703 0.676 0.650 0.625 0.601 0.577 0.555 0.534 0.513 0.494 0.475 0.456 0.375 0.308 201208 5% 0.952 0.907 0.864 0.823 0.784 0.746 0.711 0.677 0.645 0.614 0.585 0.557 0.530 0.505 0.481 0.458 0.436 0.416 0.396 0.377 0.295 0.231 112 Percent 6% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 0.527 0.497 0.469 0.442 0.417 0.394 0.371 0.350 0.331 0.312 0.233 0.174 0.097 7% 0.935 0.873 0.816 0.763 0.713 0.666 0.623 0.582 0.544 0.508 0.475 0.444 0.415 0.388 0.362 0.339 0.317 0.296 0.277 0.258 0.184 0.131 ORT 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.315 0.292 0.270 0.250 0.232 0.215 0.146 0.099 01.16 9% 0.917 0.842 0.772 0.708 0.650 0.596 0.547 0.502 0.460 0.422 0.388 0.356 0.326 0.299 0.275 0.252 0.231 0.212 0.194 0.178 0.116 0.075 0032 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.350 0.319 0.290 0.263 0.239 0.218 0.198 0.180 0.164 0.149 0.092 0.057 0022 11% 0.901 0.812 0.731 0.659 0.593 0.535 0.482 0.434 0.391 0.352 0.317 0.286 0.258 0.232 0.209 0.188 0.170 0.153 0.138 0.124 Pate Windo 0.074 0.044 2015 25 30 40 50 0.780 0.742 0.672 0.600 0.610 0.552 0.453 0.372 0.478 0.412 0.307 0.228 0.375 0.308 0.208 0.141 0.295 0.231 0.142 0.087 0.23 0.174 0.097 0.054 0.184 0.131 0.067 0.034 0.145 0.099 0.046 0.021 0.116 0.075 0.032 0.013 0.092 0.057 0.022 0.009 0.074 0.044 0.015 0.005 Period 2 3 7 8 9. 10 11 12 13 14 15 16 17 18 19 20 25 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 0.146 0.130 0.116 0.104 0.059 0.033 13% 0.885 0.783 0.693 0.613 0.543 0.480 0,425 0.376 0.333 0.295 0.261 0.231 0.204 0.181 0.160 0.141 0.125 0.111 0.098 0.087 0.047 0026 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.300 0.270 0.237 0.208 0.182 0.160 0.140 0.123 0.108 0.095 0.083 0.073 0.038 0.020 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 0.215 0.187 0.163 0.141 0.123 0.107 0.093 0.081 0.070 0.061 0.030 00S 16% 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0.108 0.093 0.080 0.069 0.060 0.051 0.024 10.02 17% 0.855 0.731 0.624 0.534 0.456 0.390 0.333 0.285 0.243 0.208 0.178 0.152 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.043 0.020 0.009 Percent 18% 0.847 0.718 0.609 0.515 0.437 0.370 0.314 0.266 0.225 0.191 0.162 0.137 0.116 0.099 0.084 0.071 0.060 0.051 0.043 0.037 0.016 0.007 19% 0.840 0.706 0.593 0.499 0.419 0.352 0.296 0.249 0.209 0.176 0.148 0.124 0.104 0.088 0.074 0.062 0.052 0.044 0.037 0.031 0.013 0.005 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.054 0.045 0.038 0.031 0.026 0.010 0.004 25% 0.800 0.640 0.512 0.410 0.320 0.262 0.210 0.168 0.134 0.107 0.086 0.069 0.055 0.044 0.035 0.028 0.023 0.018 0.014 0.012 0.004 0.001 30% 0.769 0.592 0.455 0.350 0.269 0.207 0.159 0.123 0.094 0.073 0.056 0.043 0.033 0.025 0.020 0.015 0.012 0.009 0.007 0.005 0.001 0 35% 0.741 0.549 0.406 0.301 0.223 0.165 0.122 0.091 0.067 0.050 0.037 0.027 0.020 0.015 0.011 0.008 0.006 0.005 0.003 0.002 0.001 0 40% 50% 0.714 0.667 0.510 0.444 0.364 0.296 0.260 0.198 0.186 0.132 0.133 0.088 0.095 0.059 0.068 0.039 0.048 0.026 0.035 0.017 0.025 0.012 0.018 0.008 0.013 0.005 0.009 0.003 0.006 0.002 0.005 0.002 0.003 0.001 0.002 0.001 0.002 ateinde 0.001 0 0 0 0 0 10 11 12 13 14 15 16 17 18 19 20 25 30 40 50 0.712 0,636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 0.146 0.130 0.116 0.104 0.059 0.033 0.011 0.003 0.69 0,613 0.543 0.480 0.425 0.376 0.333 0.295 0.261 0.231 0.204 0.181 0.160 0.141 0.125 0.111 0.098 0.087 0.047 0.026 0.008 0.002 0.675 0.592 0.519 0.456 0.400 0.351 0.300 0.270 0.237 0.208 0.182 0.160 0.140 0.123 0.108 0.095 0.083 0.073 0.038 0.020 0.005 0.001 0.572 0.497 0.432 0.376 0.327 0.284 0.247 0.215 0.187 0.163 0.141 0.123 0.107 0.093 0.081 0.070 0.061 0.030 0.015 0.001 0.001 0.611 0.552 0.476 0.410 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0.10B 0.093 0.080 0.069 0.060 0.051 0.024 0.012 0.003 0.001 0.624 0.534 0.456 0.390 0.13 0.285 0.243 0.208 0.178 0.152 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.043 0.020 0.009 0.002 0 0.66 0.515 0.437 0.370 0.314 0.266 0.225 0.191 0.162 0.137 0.116 0.099 0.004 0.071 0.060 0.051 0.043 0.037 0.016 0.007 0.001 0 0.13 0.499 0.419 0.352 0.296 0.249 0.209 0.176 0.148 0.124 0.104 0.088 0.074 0.062 0.052 0.044 0.037 0.031 0.013 0.005 0.001 0 0.570 0.42 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.054 0.045 0.038 0.031 0.026 0.010 0.004 0.001 0 0.512 0.410 0.320 0.262 0.210 0.168 0.134 0.107 0.086 0.069 0.055 0.044 0.035 0.028 0.023 0.018 0.014 0.012 0.004 0.001 0 0 0.455 0.350 0.289 0.207 0.159 0.123 0.094 0.073 0.056 0.013 0.033 0.025 0.020 0.015 0.012 0.009 0.007 0.005 0.001 0 0 0 0.406 0.301 0.223 0.165 0.122 0.091 0.067 0.050 0.037 0.027 0.020 0.015 0.011 0.008 0.006 0.005 0.003 0.002 0.001 0 0 0 0.364 0.260 0.186 0.133 0.095 0.068 0.048 0.035 0.025 0.018 0.013 0.009 0.006 0.005 0.003 0.002 0.002 0.001 0 0 0.296 0.198 0.132 0.088 0.059 0.019 0.026 0.017 0.012 0.008 0.005 0.003 0.002 0.002 0.001 0.001 OOOOO 0 Note: Factor calculation with calculator Set Set PMT -0 Select number of requtred periods Select wyroquired interest rate COM P-7 Excel Spreadsheet PVNO, FV. Oy 1-Decimal or 1 For beginning of period (5th spot Activate Windo Hunter Petroleum Corporation paid a $2 dividend last year. The dividend is expected to grow at a constant rate of 5 percent forever. The required rate of return is 12 percent (this will also serve as the discount rate in this problem). Use Arpendix B. a. Compute the anticipated value of the dividends for the next three years. (Do not round intermediate calculations. Round the final answer to 3 decimal places.) Anticipated value Di D2 Dj $ $ $ b. Calculate the present value of each of the anticipated dividends at a discount rate of 12 percent. (Round "PV Factor" to 3 decimal places. Round intermediate calculations to 3 decimal places. Round the final answers to 3 decimal places.) PV of dividends Di D2 D Total $ b. Calculate the present value of each of the anticipated dividends at a discount rate of 12 percent. (Round "PV Factor" to 3 decimal places. Round intermediate calculations to 3 decimal places. Round the final answers to 3 decimal places.) PV of dividends $ Di D2 D3 Total $ c. Compute the price of the stock at the end of the third year (P3). (Round "PV Factor" to 3 decimal places. Round intermediate calculations to 2 decimal places. Round the final answer to 2 decimal places.) P3- D4 Ke-9 D is equal to D, times 105) Price of the stock d. Calculate the present value of the year 3 stock price at a discount rate of 12 percent (Round "PV Foctor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 3 decimal places.) ovate Windows c.Compute the price of the stock at the end of the third year (P3). (Round "PV Factor" to 3 decimal places. Round intermediate calculations to 2 decimal places. Round the final answer to 2 decimal places.) P3 04 Ke-9 (D is equal to Dg times 1.05) Price of the stock $ d. Calculate the present value of the year 3 stock price at a discount rate of 12 percent. (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 3 decimal places.) Price of the stock (discounted) e. Compute the current value of the stock (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 2 decimal places.) Current value f. Use formula given below to show that it will provide approximately the same answer as part e (Round the final answer to 2 decimal places.) Po - D1 Ke-9 Price of the stock d. Calculate the present value of the year 3 stock price at a discount rate of 12 percent. (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 3 decimal places.) Price of the stock (discounted) e. Compute the current value of the stock. (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 2 decimal places.) Current value f. Use formula given below to show that it will provide approximately the same answer as part e. (Round the final answer to 2 decimal places.) D Pe Ke-9 For formula 10-8, use Du = $2.10. Ke -12 percent, and g5 percent. (The slight difference between the answers to parts e and is due to rounding.) Current value APPENDIX B Present Value of $1, PV, PV = FV0.-) - F/(1+6)- Period 2. 5 6. 8. 10...... 11 12 13.... 14. 15 16.. 17 18 19 20 25 30 1% 0.990 0.900 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0.828 0.820 0.780 0.742 0.6772 2% 0.980 0.961 0.942 0.924 0.906 0.8BB 0.871 0.853 0.837 0.820 0.804 0.788 0.773 0.758 0.743 0.728 0.714 0.700 0.686 0.673 0.610 0.552 0493 3% 0.971 0.943 0.915 0.885 0.863 0.837 0.813 0.789 0.766 0.744 0.722 0.701 0.681 0.661 0.642 0.623 0.605 0.587 0.570 0.554 0.478 0.412 0207 49 0.962 0.925 0.889 0.855 0.822 0.790 0.760 0.731 0.703 0.676 0.650 0.625 0.601 0.577 0.555 0.534 0.513 0.494 0.475 0.456 0.375 0.308 201208 5% 0.952 0.907 0.864 0.823 0.784 0.746 0.711 0.677 0.645 0.614 0.585 0.557 0.530 0.505 0.481 0.458 0.436 0.416 0.396 0.377 0.295 0.231 112 Percent 6% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 0.527 0.497 0.469 0.442 0.417 0.394 0.371 0.350 0.331 0.312 0.233 0.174 0.097 7% 0.935 0.873 0.816 0.763 0.713 0.666 0.623 0.582 0.544 0.508 0.475 0.444 0.415 0.388 0.362 0.339 0.317 0.296 0.277 0.258 0.184 0.131 ORT 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.315 0.292 0.270 0.250 0.232 0.215 0.146 0.099 01.16 9% 0.917 0.842 0.772 0.708 0.650 0.596 0.547 0.502 0.460 0.422 0.388 0.356 0.326 0.299 0.275 0.252 0.231 0.212 0.194 0.178 0.116 0.075 0032 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.350 0.319 0.290 0.263 0.239 0.218 0.198 0.180 0.164 0.149 0.092 0.057 0022 11% 0.901 0.812 0.731 0.659 0.593 0.535 0.482 0.434 0.391 0.352 0.317 0.286 0.258 0.232 0.209 0.188 0.170 0.153 0.138 0.124 Pate Windo 0.074 0.044 2015 25 30 40 50 0.780 0.742 0.672 0.600 0.610 0.552 0.453 0.372 0.478 0.412 0.307 0.228 0.375 0.308 0.208 0.141 0.295 0.231 0.142 0.087 0.23 0.174 0.097 0.054 0.184 0.131 0.067 0.034 0.145 0.099 0.046 0.021 0.116 0.075 0.032 0.013 0.092 0.057 0.022 0.009 0.074 0.044 0.015 0.005 Period 2 3 7 8 9. 10 11 12 13 14 15 16 17 18 19 20 25 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 0.146 0.130 0.116 0.104 0.059 0.033 13% 0.885 0.783 0.693 0.613 0.543 0.480 0,425 0.376 0.333 0.295 0.261 0.231 0.204 0.181 0.160 0.141 0.125 0.111 0.098 0.087 0.047 0026 14% 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.300 0.270 0.237 0.208 0.182 0.160 0.140 0.123 0.108 0.095 0.083 0.073 0.038 0.020 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 0.215 0.187 0.163 0.141 0.123 0.107 0.093 0.081 0.070 0.061 0.030 00S 16% 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0.108 0.093 0.080 0.069 0.060 0.051 0.024 10.02 17% 0.855 0.731 0.624 0.534 0.456 0.390 0.333 0.285 0.243 0.208 0.178 0.152 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.043 0.020 0.009 Percent 18% 0.847 0.718 0.609 0.515 0.437 0.370 0.314 0.266 0.225 0.191 0.162 0.137 0.116 0.099 0.084 0.071 0.060 0.051 0.043 0.037 0.016 0.007 19% 0.840 0.706 0.593 0.499 0.419 0.352 0.296 0.249 0.209 0.176 0.148 0.124 0.104 0.088 0.074 0.062 0.052 0.044 0.037 0.031 0.013 0.005 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.054 0.045 0.038 0.031 0.026 0.010 0.004 25% 0.800 0.640 0.512 0.410 0.320 0.262 0.210 0.168 0.134 0.107 0.086 0.069 0.055 0.044 0.035 0.028 0.023 0.018 0.014 0.012 0.004 0.001 30% 0.769 0.592 0.455 0.350 0.269 0.207 0.159 0.123 0.094 0.073 0.056 0.043 0.033 0.025 0.020 0.015 0.012 0.009 0.007 0.005 0.001 0 35% 0.741 0.549 0.406 0.301 0.223 0.165 0.122 0.091 0.067 0.050 0.037 0.027 0.020 0.015 0.011 0.008 0.006 0.005 0.003 0.002 0.001 0 40% 50% 0.714 0.667 0.510 0.444 0.364 0.296 0.260 0.198 0.186 0.132 0.133 0.088 0.095 0.059 0.068 0.039 0.048 0.026 0.035 0.017 0.025 0.012 0.018 0.008 0.013 0.005 0.009 0.003 0.006 0.002 0.005 0.002 0.003 0.001 0.002 0.001 0.002 ateinde 0.001 0 0 0 0 0 10 11 12 13 14 15 16 17 18 19 20 25 30 40 50 0.712 0,636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 0.146 0.130 0.116 0.104 0.059 0.033 0.011 0.003 0.69 0,613 0.543 0.480 0.425 0.376 0.333 0.295 0.261 0.231 0.204 0.181 0.160 0.141 0.125 0.111 0.098 0.087 0.047 0.026 0.008 0.002 0.675 0.592 0.519 0.456 0.400 0.351 0.300 0.270 0.237 0.208 0.182 0.160 0.140 0.123 0.108 0.095 0.083 0.073 0.038 0.020 0.005 0.001 0.572 0.497 0.432 0.376 0.327 0.284 0.247 0.215 0.187 0.163 0.141 0.123 0.107 0.093 0.081 0.070 0.061 0.030 0.015 0.001 0.001 0.611 0.552 0.476 0.410 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0.10B 0.093 0.080 0.069 0.060 0.051 0.024 0.012 0.003 0.001 0.624 0.534 0.456 0.390 0.13 0.285 0.243 0.208 0.178 0.152 0.130 0.111 0.095 0.081 0.069 0.059 0.051 0.043 0.020 0.009 0.002 0 0.66 0.515 0.437 0.370 0.314 0.266 0.225 0.191 0.162 0.137 0.116 0.099 0.004 0.071 0.060 0.051 0.043 0.037 0.016 0.007 0.001 0 0.13 0.499 0.419 0.352 0.296 0.249 0.209 0.176 0.148 0.124 0.104 0.088 0.074 0.062 0.052 0.044 0.037 0.031 0.013 0.005 0.001 0 0.570 0.42 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.054 0.045 0.038 0.031 0.026 0.010 0.004 0.001 0 0.512 0.410 0.320 0.262 0.210 0.168 0.134 0.107 0.086 0.069 0.055 0.044 0.035 0.028 0.023 0.018 0.014 0.012 0.004 0.001 0 0 0.455 0.350 0.289 0.207 0.159 0.123 0.094 0.073 0.056 0.013 0.033 0.025 0.020 0.015 0.012 0.009 0.007 0.005 0.001 0 0 0 0.406 0.301 0.223 0.165 0.122 0.091 0.067 0.050 0.037 0.027 0.020 0.015 0.011 0.008 0.006 0.005 0.003 0.002 0.001 0 0 0 0.364 0.260 0.186 0.133 0.095 0.068 0.048 0.035 0.025 0.018 0.013 0.009 0.006 0.005 0.003 0.002 0.002 0.001 0 0 0.296 0.198 0.132 0.088 0.059 0.019 0.026 0.017 0.012 0.008 0.005 0.003 0.002 0.002 0.001 0.001 OOOOO 0 Note: Factor calculation with calculator Set Set PMT -0 Select number of requtred periods Select wyroquired interest rate COM P-7 Excel Spreadsheet PVNO, FV. Oy 1-Decimal or 1 For beginning of period (5th spot Activate Windo