Problem $8-20$ Spreadsheet Problem: P$/$E Model and Cash Flow Valuation $($LG$8-5,$ LG$8-7)$

Suppose that a firm's recent earnings per share and dividend per share are $$3\mathrm{.}15$ and $$2\mathrm{.}60,$ respectively. Both are expected to grow at $6$ percent. However, the firm's current P$/$E ratio of $27$ seems high for this growth rate. The P$/$E ratio is expected to fall to $23$ within five years.

Compute the dividends over the next five years.

Compute the value of this stock price in five years.

Calculate the present value of these cash flows using an $8$ percent discount rate.

Complete this question by entering your answers in the tabs below.

Dividends

Stock price

Present value

Compute the dividends over the next five years.

Note: Do not round intermediate calculations. Round your answers to $3$ decimal places.

$\backslash$table$[[$Years$,$Dividends$],[$First year,$],[$Second year,$],[$Third year,$],[$Fourth year,$],[$Fifth year,$]]$