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Your broker offers to sell you some shares of Bahnsen : 8 Co. common stock that paid a dividend of $2.75 yosterday. Bshnsen's dividend is

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Your broker offers to sell you some shares of Bahnsen : 8 Co. common stock that paid a dividend of $2.75 yosterday. Bshnsen's dividend is expected to grow at 7%6 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=$2.75. Do not round intermediate ceiculetions. Round your answers to the nearest cent. D1=5D2=5D3=5 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 PV/s, Do not round intermediate calculations. Round your answer to the nearest cent. 5 c. You expect the price of the stock 3 years from now to be $120.16; that is, you expect P1 to equal $120.16, Discounted at a 10% rate, what is the present value of this expected future stock price? in other words, calculate the PV of $120.16. Do not round intarmediate calculations. Round your answer to the nearest cent: 5 d. If you plan to buy the stock, hold it for 3 years, and then sell it for $120.16, what is the most you should pay for it today? Do not round intertrendiate calculations. Round your answer to the nearest cent. 5 e. Use equation below to calculate the present value of this stock. Assume that g=7% and that it is constant. Do not round intermediate calculations. Round your answer to the nearest cent. s

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