White Lotus Inc. has just been granted a patent from the US Patent Office and the company is set to manufacture lithium-ion batteries using their latest technology. Over the next 5 years, the company projects that it can grow by 25% annually. From year 6 onwards, the company estimates they will reach a sustainable growth due to fierce industry competition. The long-term growth rate is expected to be 4%. The company has just paid a $1 dividend per share.

a) What is the expected annual dividend over the next 5 years?

b) Assuming that the firms cost of equity is 12.5%, what is the expected stock price 5 years from now?

c) Estimate the companys stock price today.

d) What is the expected dividend yield?

e) Estimate the companys stock price at year 1, P_1.

f) Assume youre among the companys investors who buy the stock now. You plan to sell the stock in 1 year. What is your expected rate of return? If the stock is fairly priced, what can you infer from your expected rate of return?

Please provide the correct calculation and work step-by-step.