ReizensteinTechnologies (RT) has just developed a solar panel capable ofgenerating 200% more electricity than any solar panel currently onthe market. As a result, RT is expected to experience a 15% annualgrowth rate for the next 5 years. By the end of 5 years, otherfirms will have developed comparable technology, and RT's growthrate will slow to 7% per year indefinitely. Stockholders require areturn of 13% on RT's stock. The most recent annual dividend(D₀), which was paid yesterday, was $1.10 per share.

1. Calculate RT's expecteddividends for t = 1, t = 2, t = 3, t = 4, and t = 5. Do not roundintermediate calculations. Round your answers to the nearest cent.

   D₁ = $

   D₂ = $

   D₃ = $

   D₄ = $

   D₅ = $

2. Calculate the estimatedintrinsic value of the stock today, . Proceed by finding thepresent value of the dividends expected at t = 1, t = 2, t = 3, t =4, and t = 5 plus the present value of the stock price that shouldexist at t = 5, . The stock price can be found by using theconstant growth equation. Note that to find you use the dividendexpected at t = 6, which is 7% greater than the t = 5 dividend.Round your answer to the nearest cent. Do not round yourintermediate computations.
   $
   
3. Calculate the expecteddividend yield (D₁/ ), the capital gains yield expectedduring the first year, and the expected total return (dividendyield plus capital gains yield) during the first year. (Assume that= P₀, and recognize that the capital gains yield isequal to the total return minus the dividend yield.). Round youranswers to two decimal places. Do not round your intermediatecomputations.

   Expected dividend yield	%
   Capital gains yield	%
   Expected total return	%

   
   Also calculate these same three yields for t = 5 (e.g.,D₆/ ). Round your answers to two decimal places. Do notround your intermediate computations.

   Expected dividend yield	%
   Capital gains yield	%
   Expected total return	%

4. 
   
5. If your calculated intrinsicvalue differed substantially from the current market price, and ifyour views are consistent with those of most investors (themarginal investor), what would happen in the marketplace?
   I. If the price as estimated by the marginalinvestor differs from the market price, then investors will buy orsell until an equilibrium has been established, with the intrinsicvalue as estimated by the marginal investor equals the actualmarket price.
   II. If the price as estimated by the marginalinvestor differs from the market price, then investors will buy orsell until an equilibrium has been established, with the intrinsicvalue as estimated by the marginal investor is more than the actualmarket price.
   III. If the price as estimated by the marginalinvestor differs from the market price, then investors will buy orsell until an equilibrium has been established, with the intrinsicvalue as estimated by the marginal investor is less than the actualmarket price.
   IV. If the price as estimated by the marginalinvestor differs from the market price, then investors will not buyor sell anything until a new equilibrium has beenestablishes.
   -Select-IIIIIIIV
   
   What would happen if your views were not consistent withthose of the marginal investor and you turned out to becorrect?
   I. If you think the stock is priced above or belowits intrinsic value, then you should at least consider selling ifthe stock is undervalued or buying if it is overvalued. If you turnout to be correct, then you will make money, eventually if you holdon to an unpopular position long enough.
   II. If you think the stock is priced above orbelow its intrinsic value, then you should at least consider buyingif the stock is undervalued or selling if it is overvalued. If youturn out to be correct, then you will make money, eventually if youhold on to an unpopular position long enough.
   III. If you think the stock is priced above orbelow its intrinsic value, then you should at least consider buyingif the stock is undervalued or selling if it is overvalued. If youturn out to be correct, then you will lose money, eventually if youhold on to an unpopular position long enough.
   IV. If you think the stock is priced above orbelow its intrinsic value, then you should at least considerselling if the stock is undervalued or buying if it is overvalued.If you turn out to be correct, then you will lose money, eventuallyif you hold on to an unpopular position long enough.
   -Select-IIIIIIIV