Problem 3 (9 marks) It was anticipated that Down-east Industries Incorporated would pay a cash dividend of $3.00 per share at the end of year o in problem 2. The board of directors approved the suspending of dividends for year and the suspension of dividends for the next 5 years as the company undertakes major expansion projects and reinvests all the earnings (100 percent retention ratio). The company anticipates the dividend that will be paid will be $7.00. Management expects that dividends will grow at a constant rate of 5 percent per year forever and investors require an 18 percent rate of return. a. What is the expected price of the share today? Show your work! (3 marks) b. Should Down-east Industries take on this project or continue on as per problem 2-reject the new investment and pay the $3.00 dividend? Explain! (2 marks) c. What is the minimum cash dividend the company will need to pay for the share to maintain its current market price as calculated in Problem 2? Show your work! (3 marks) Problem 2 (6 marks) Down-east Industries Incorporated has just paid its most recent cash dividend of $3.00 per share. Management expects dividends to grow at a constant rate of 8 percent per year forever and investors require a 16 percent rate of return. a. What is the expected price of the share today? Show your work! (3 marks) b. What is the expected price of the share 5 years from today? Show your work