Sprel$$s most recent annual dividend was $$1\mathrm{.}60$ per share, and the firm$$s required

rate of return is $12\%.$ Dividends are expected to grow at $15\%$ annually for $3$

years, followed by a $5\%$ constant annual growth rate in years $4$ to infinity. $[13$

marks$]$

$($a$)$ What are the expected values of DIV$1,$ DIV$2,$ DIV$3,$ and DIV$4?$

$($b$)$ What should the stock price be three years from now and what is the

stock price today?

$($c$)$ Find the dividend yield, DIV$1/$P$0.$

$($d$)$ What will next year$$s stock price, P$1,$ be$?$

$($e$)$ What is the expected rate of return to an investor who buys the stock

now and sells it in one year?