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 11%.

a. D1= 4.16

D2= 4.33

D3= 4.50

b. Given that the first dividend payment will occur 1 year from now, find the present value of the dividend stream.

ANS. $10.55 (Correct)

? c. You expect the price of the stock 3 years from now to be $66.85; that is, you expect to equal $66.85. Discounted at an 11% rate, what is the present value of this expected future stock price? In other words, calculate the PV of $66.85. (Round the answer to the nearest cent. Do not round your intermediate calculations)

I got 47.48 for the answer (wrong) ??

? d. If you plan to buy the stock, hold it for 3 years, and then sell it for $66.85, what is the most you should pay for it today? (Round the answer to the nearest cent. Do not round your intermediate calculations)

? e. Use the equation below to calculate the present value of this stock. Assume that g = 4% and that it is constant. (Round the answer to the nearest cent. Do not round your intermediate calculations)

P0= [D0(1+g)] / (rs-g)= D1/(rs-g)