Question $3($A$)$ Cornerstone Corporation is a large construction company in Boston, Massachusetts. Their income statement for last year indicated a net income of $$12,500,000,$ and the corporation has $1,100,000$ shares of common stock outstanding. The current stock price of Cornerstone Corporation on the Boston stock exchange is $$13\mathrm{.}75$ per share. It is looking to expand its operation to the neighbouring cities and will be issuing $400,000$ extra shares and expects to have a net income of $$16,000,000$ by the end of the current year.$$Required$($a$)$ Assuming the companys price to earnings ratio remains at its current level, what will be the companys stock price one year from now? $(10$ points$)($b$)$ The P$/$E ratio is a very common method used by investors to get a quick calculation of the markets perception of a company. Evaluate the formula used to calculate the P$/$E ratio focusing on the limitations of this method of valuation? $(5$ points$)($B$)$ Consider company ABC, ABC paid a $3$USD dividend in $2023$ and at the end of $2023$ its share price was $50$USD while its book value was only $35$USD per share. ABCs earnings per share for $2017$ is $25$USD and the replacement cost of its assets were $$25$ million.$$Required$($a$)$ Calculate the dividend yield, price$-$to$-$book ratio and price$-$to$-$earnings ratio. $(6$ points$)($b$)$ Interpret the results of the price$-$to$-$book ratio and price$-$to$-$earnings ratio. $(4$ points$)(15+10=25$ points$)$Question $4$Maxwell Company just paid an annual dividend of $$1\mathrm{.}2$ per share. Its dividend is expected to triple for the next four years $($D$1$ through D$4),$ after which it will grow at a more modest pace of $2\%$ per year. The required return is $15\%,$Required$($a$)$ Calculate the current price $(15$ points$)($b$)$ Critically present and discuss the three basic stock valuation models $($Zero growth model, constant growth model and variable growth model$)$ by giving necessary equations. $(10$points$)$