1. The current (year 0) price of the shares of Company XYZ is $50. There are N = 1 million shares outstanding. Next year (year 1)s earnings and dividends per share are $4 and $2, respectively. Investors expected perpetual dividend growth at g = 8% per year. The expected rate of return demanded by investors is r=12%. (10 points)

1. What will be the dividend per share in the next 3 years?

2. What is the current market value of the firm?

3. What will be the value of the firm next year after the payout?