The next three problems refer to Roadrunner Enterprises. The company just paid a $1.00 dividend. Roadrunner Enterprises is expected to grow its dividends and earnings at various rates. The company expects to grow its earnings and dividends at 13% for the next three years, after which the company expects to grow at a constant rate of 7% per year indefinitely. The required rate of return on the common stock is 15%. 27. What is the present value of the first three years' dividends? A) Less than $2.00 B) $2.00 to $2.50 $2.50 to $2.75 $2.75 to $3.00 More than $3.00 E) 28. What is the present value of the residual? [The "residual" is the Fair Market Value (FMV) of the stock when constant growth begins.] A) Less than $10.00 B) $10.00 to $15.00 1) 2l D) E) $15.00 to $20.00 $20.00 to $25.00 More than $25.00 29. What is the FMV of the stock now? [Hint: The FMV is the PV of the first three dividends plus the PV of the residual.] A) Less than $10.00 B) $10.00 to $15.00 D) E) $15.00 to $20.00 $20.00 to $25.00 More than $25.00 30. Darken Letter E on your Scantron and answer below: What will you remember from this class