Your broker offers to sell you some shares of Bahnsen Co common stock that paid a dividend of $4 00 yesterday Bahnsen's dividend is expected to grow at 4 per year for the next 3 years If you buy the stock, you plan to hold it for 3 years and then sell it The appropriate discount rate is 10 a Find the expected dividend for each of the next 3 years that is, calculate D1, D2, and D3 Note that D0 $4 00 Do not round intermediate calculations Round your answers to the nearest cent D1 $ D2 $ D3 $ b Given that the first dividend payment will occur 1 year from now, find the present value of the dividend stream that is, calculate the PVs of D 1 , D 2 , and D 3 , and then sum these PVs Do not round intermediate calculations Round your answer to the nearest cent c You expect the price of the stock 3 years from now to be $77 99 that is, you expect to equal $77 99 Discounted at a 10 rate, what is the present value of this expected future stock price In other words, calculate the PV of $77 99 Do not round intermediate calculations Round your answer to the nearest cent d If you plan to buy the stock, hold it for 3 years, and then sell it for $77 99, what is the most you should pay for it today Do not round intermediate calculations Round your answer to the nearest cent

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Your broker offers to sell you some shares of Bahnsen & Co. common stock that paid a dividend of $4.00 yesterday. Bahnsen's dividend is expected

Your broker offers to sell you some shares of Bahnsen & Co. common stock that paid a dividend of $4.00 yesterday. Bahnsen's dividend is expected to grow at 4% per year for the next 3 years. If you buy the stock, you plan to hold it for 3 years and then sell it. The appropriate discount rate is 10%.

a. Find the expected dividend for each of the next 3 years; that is, calculate D1, D2, and D3. Note that D0 = $4.00. Do not round intermediate calculations. Round your answers to the nearest cent.

D1= $

D2= $

D3=$

b. Given that the first dividend payment will occur 1 year from now, find the present value of the dividend stream; that is, calculate the PVs of D₁, D₂, and D₃, and then sum these PVs. Do not round intermediate calculations. Round your answer to the nearest cent.

c. You expect the price of the stock 3 years from now to be $77.99; that is, you expect to equal $77.99. Discounted at a 10% rate, what is the present value of this expected future stock price? In other words, calculate the PV of $77.99. Do not round intermediate calculations. Round your answer to the nearest cent.

d. If you plan to buy the stock, hold it for 3 years, and then sell it for $77.99, what is the most you should pay for it today? Do not round intermediate calculations. Round your answer to the nearest cent.