$($SOLVE IN EXCEL$)$

You are analyzing Jillian$$s Jewelry $($JJ$)$ stock for a possible purchase. JJ just paid a dividend of $$3\mathrm{.}75$ yesterday. You expect the dividend to grow at the rate of $4\%$ per year for the next $3$ years; if you buy the stock, you plan to hold it for $3$ years and then sell it$.$

What dividends do you expect for JJ stock over the next $3$ years? In other words, calculate D$1,$ D$2$ and D$3.$ Note that D$0=$ $$3\mathrm{.}75.$ Do not round intermediate calculations. Round your answers to the nearest cent.

D$1=$ $

D$2=$ $

D$3=$ $

JJ stock has a required return of $11\%,$ and so this is the rate you'll use to discount dividends. Find the present value of the dividend stream; that is$,$ calculate the PV of D$1,$ D$2,$ and D$3,$ and then sum these PVs$.$ Do not round intermediate calculations. Round your answer to the nearest cent.

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JJ stock should trade for $$62\mathrm{.}673$ years from now $($i$.$e$.,$ you expect $=$ $$62\mathrm{.}67).$ Discounted at an $11\%$ rate, what is the present value of this expected future stock price? In other words, calculate the PV of $$62\mathrm{.}67.$ Do not round intermediate calculations. Round your answer to the nearest cent.

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If you plan to buy the stock, hold it for $3$ years, and then sell it for $$62\mathrm{.}67,$ what is the most you should pay for it$?$ Do not round intermediate calculations. Round your answer to the nearest cent.

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Use the constant growth model to calculate the present value of this stock. Assume that gL $=4\%,$ and it is constant. Do not round intermediate calculations. Round your answer to the nearest cent.

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