Question 3 (10 marks) LogiTel Corp. is a public company which had issued both common stock and cumulative preferred stock. In its recent meeting, management has decided not to pay dividends in the next 3 years. a) John, a shareholder of LogiTel, is unhappy with the management's decision and intends to sue the company for not paying dividends. Briefly comment on John's intention. I (2 marks) b) Briefly explain the cumulative feature of preferred stock. (2 marks) c) Assume that LogiTel will pay a dividend of $1 per share of common stock at the end of year 4. Dividends are expected to grow at 5% per year in year 5 and 6. After that, dividends will growth at a constant rate of 1% per year indefinitely. Calculate the current common stock price if the required return is 8%. (6 marks)