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Your broker offers to sell you some shares of Bahnsen & Co. common stock that paid a dividend of $3.00 Yesterday. Bahnsen's dividend expected to

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Your broker offers to sell you some shares of Bahnsen & Co. common stock that paid a dividend of $3.00 Yesterday. Bahnsen's dividend expected to grow at 8% 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 D_1, D_2 and D_3. Note that D_0 = $3.00. Round your answer to the nearest cent. D_1 = $ D_2 = $ D_3 = $ 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. Round your answer to the nearest cent. Do not round your intermediate calculations. $ c. You expect the price of the stock 3 years from now to be $204.07; that is, you expect P_3 to equal $204.07. Discounted at a 10% rate, what is the present value of this expected future stock price? In other words, calculate the PV of $204.07. Round your answer to the nearest cent. Do not round your intermediate calculations. $ If you plan to buy the stock, hold it for 3 years, and then sell it for $204.07, what is the most you should pay for it today? Round your answer to the nearest cent. Do not round your intermediate calculations. $ e. Use equation below to calculate the present value of this stock. P_0 = D_0(1 + g)/r_s - g Assume that g = 8% and that it is constant. Do not round intermediate calculations. Round your answer to the nearest cent. $

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