Suppose Acap Corporation will pay a dividend of $2.80 per share at the end of this year and a dividend of $3 per share next year. You expect Acaps stock price to be $52 in two years. Assume that Acaps equity cost of capital is 10%.

Dividend in 1 year Dividend in 2 years Share price in 2 years Equity cost of capital $2.80 $3.00 $52.00 10% a. What price would you be willing to pay for a share of Acap stock today, if you planned to hold the stock for two years? Holding period (years) Price per share b. Suppose instead you plan to hold the stock for one year. What price would you expect to be able to sell a share of Acad stock for in one vear? Holding period (years) Price per share c. Given your answer in part (b), what price would you be willing to pay for a share of Acap stock today, if you planned to hold the stock for one year? How does this price compare to your answer in part (a)? Price per share The price you would pay fected by the amount of time you hold the stock is is not ents Requirements 1. Start Excel - completed. 2. In cell D18, by using cell references, calculate the price that you would be willing to pay for the stock if you plan to hold it for two years (1 pt.). 3. In cell D24, by using cell references, calculate the price at which you would be able to sell the stock in one year (1 pt.). 4. In cell D28, by using cell references, calculate the price that you would be willing to pay for the stock today if you plan to hold it for one year (1 pt.). 5. In cell D29, select whether the price you would pay is or is not affected by the holding period (1 pt.). 6. Save the workbook Close the workbook and then exit Excel Submit the workbook as directed