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The charman of Heller Industries told a meeting of financial analysts that he expects the firm's earnings and dividends to double over the next 6

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The charman of Heller Industries told a meeting of financial analysts that he expects the firm's earnings and dividends to double over the next 6 years. The firm's current (that is, as of year 0 ) earnings and dividends per share are $8.25 and $2.75, respectively. Use Table 1 and Table II to answer the questions. a. Estimate the compound annual dividend growth rate over the 6-year period. Round FVIF value in intermediate calculation to three decimal places. Round your answer to the nearest whole number. % b. Forecast Heller's eamings and dividends per share for each of the next 6 years, assuming that they orow at the rate determined in Part a. Use the growth rate rounded to the nearest whole percent. Round your answers to three decirnal places. c. Based on the constant growth dividend valuation model, determine the current value of a share of Heller Industries common stock to an investor who requires a 19 percent rate of return. Do not round intermediate calculations. Round your answer to the nearest cent. s. d. The stock price calculated in part c might not represent an accurate valuation to an investor with a 19 percent required rate of return because the growth rate will e. Determine the current value of a share of Heller Industries common stock to an investor (with a 19 percent required rate of return) who plans to hold it for 6 years, assuming that earnings and dividends per share grow at the rate determined in part a for the neact 6 years and then at 4 bercent thereafter, Do not round intermediate calculations. Round your answer to the nearest cent. s

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