The ABC Company has promised dividends a series of dividend payments over the next 4 years such as D1 = $3.25, D2 = $3.75, D3 = $4.25, and D4 =$4.75.Analysts forecast that dividends will grow at a constant perpetual growth rate of 6.00% per year starting in year 5. Systematic Risk for ABC is estimated with a Beta coefficient of 1.09 while the market risk premium is forecasted to be10% and the risk-free rate is 1%. Given this information, answer the following:

a. What is the required return on equity for ABC?(10 points)

b.What is the forecasted dividend per share value for year 5?(5points)

c.What is the target price, or terminal value, for ABC in Year 4?(10 points)

d.What is the estimated value per share of ABC stock today? (10 points)

e.If the current stock price quote for ABC is $61, would you make a BUY, SELL, or HOLD recommendation for ABC? Explain why with only 1 sentence.(5 points)

f.Let us now assume that analysts may be wrong about the forecasted 6.00% perpetual dividend growth rate value. If so, what perpetual dividend growth rate would make the stock value match the price quote? (5 points)

g.Given your growth rate value from Part f, what is the probability of the perpetual growth rate reaching this value? Assume that the dividend growth rate is normally distributed with a mean, or arithmetic average, of 6.00% and a standard deviation of 1.00%. (5 points)