QUESTION 5: (Total 15 marks) a. The current price of a stock is $55.04. If dividends are expected to be $1 per share for the next six years, and the required return is 8%, what should the price of the stock be in six years when you plan to sell it? If the dividend and required return remain the same, and the stock price is expected to increase by $1 six years from now, does the current stock price also increase by $1? Why or why not? (7 marks) b. Compute the price of a share of stock that pays a $5 per year dividend and that you expect to be able to sell in one year for $40, assuming you require a 5% return. (3 marks) c. Foreign exchange rates, like stock prices, should follow a random walk." Is this statement true, false, or uncertain? Explain your