The board of directors of API, a relatively new electronics manufacturer, has decided to continue

paying a common stock dividend to increase the attractiveness of the stock in the free market.

The board plans to pay $$3\mathrm{.}00$ per share in the coming year $($i$.$e$.,$ next year$)$ and anticipates that its

future dividends will increase at an annual rate consistent with that experienced over the period

from $20$X$0-20$X$3($see below$).$ The company currently has a beta of $1\mathrm{.}1,$ the rate of return for

the market is expected to be $10\%$ and the risk$-$free rate is currently $4\%.$ Given this scenario, what

is the current value of API's common stock? If the current market price is $$40\mathrm{.}00$ per share,

should you purchase this stock? Briefly, explain your answer. $($HINT: This problem requires a

three$-$part calculation to solve it$).$ Your submission must be in MS Excel with a professional

appearance in which all original problem data is displayed and labeled on the surface of

Excel, with all calculations linked to the original problem data and embedded in the cells

$($do NOT round your interim calculations$).$ This assignment must be completed

independently by each student. Post your spreadsheet using this link.

Year Dividend

$20$X$3$ $$2\mathrm{.}81$

$20$X$2$ $$2\mathrm{.}70$

$20$X$1$ $$2\mathrm{.}60$

$20$X$0$ $$2\mathrm{.}50$