PLEASE help me with Q1 & Q2! They go hand-in-hand so I wasn't sure how to post them separetely.

Q1. (Estimating dividends with differential growth) Harriford Inc. expects to have earnings this coming year of $3 per share. Harriford plans to retain all of its earnings for the next two years. Then, for the subsequent two years, the firm will retain 50% of its earnings. Any earnings that are not retained will be paid out as dividends. Earnings per share (EPS) are expected to grow at a rate of 20% until the end of year 4 . At that point, other companies are likely to bring out competing products. Analysts project that at the end of year 4, Harriford will cut its investment and begin paying 80% of its earnings as dividends. Its growth will also slow to a long-run rate of 5% Assume Harriford's share count remains constant and all earnings growth comes from the investment of retained earnings. If Hamford's equity cost of capital is 10%, what price would you estimate for Harriford stock? (1) Use the following spreadsheet, to complete the information of expected EPS and dividend per share 2 4 6 Earnings 1 EPS Growth Rate (vs. prior year) 2 EPS Dividends 3 Retention Ratio 20.0020.00 20.00 % | 5.00% | 5.00% 100% | 100% | 50%| 50%| 20%| 20% 4 Dividend Payout Ratio (1-Retention ratio) 5 Div (2 4) (2) Based on the results from (1), determine the present value of the expected dividends (hint: use the two-stage DCF valuation model)