Question 1:

Your broker offers to sell you some shares of Daktronics common stock that paid a dividend of $2.00 yesterday. Daktronicss dividend is expected to grow at 10% per year for the next 3 years and thereafter, become constant 6%. If you buy the stock, you plan to hold it for 3 years and then sell it. The appropriate discount rate is 12%. Address the following:

1. Find the expected dividend for each of the next 3 years.
2. What is the present value and total sum for all future dividends payment?
3. What is the price of the stock 3 years from now? What is the present value of this expected future stock price?
4. If you plan to buy the stock, hold it for 3 years, what is the most you should pay for it today?
5. If the current price for the stock is $29.50, should you buy?

Please show work on an excel sheet