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3. (12 points) Non-constant Growth Stock The last dividend paid by Company A was $2.4....

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3. (12 points) Non-constant Growth Stock The last dividend paid by Company A was $2.4. Its growth rate is expected to be 2.5 percent for three years, after which dividends are expected to grow at a rate of 8 percent forever. The company's stockholders require a rate of return on equity of 12 percent. 1 a. Draw a clear and accurate timeline of the expected cash flows. (4 marks) (The timeline should consist of time periods (t = 0,1,2,...), the dividend growth rate(s), and the cash flow associated with each period.) b. What is Po, the current price of the stock? (4 marks) c. What is the expected price of the stock a year later at t = 1? (4 marks) 4. (8 points) Bilibaba Inc.'s most recent dividend paid was $2.40 per share. The dividend is expected to grow at a rate of 6 percent per year in the foreseeable future. The risk- free rate is 5 percent and the return on the market is 9 percent. If the company's beta is 1.3 what is the price of the stock today

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