Fresno Corp. is a fast-growing company that expects to grow at a rate of 23 perc

Question

Fresno Corp. is a fast-growing company that expects to grow at a rate of 23 percent over the next two years and then to slow to a growth rate of 14 percent for the following three years. If the last dividend paid by the company was $2.15.

What is the dividend for 1st year? (Round answer to 3 decimal places, e.g. 15.250.)

What is the dividend for 2nd year?Round answer to 3 decimal places, e.g. 15.250.)

What is the dividend for 3rd year?Round answer to 3 decimal places, e.g. 15.250.)

What is the dividend for 4th year?Round answer to 3 decimal places, e.g. 15.250.)

What is the dividend for 5th year?Round answer to 3 decimal places, e.g. 15.250.)

Compute the present value of these dividends if the required rate of return is 14 percent. (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.)

Explanation / Answer

Statemnet showing PV of Cash flows Particulars Time PVf@14% Amount PV Cash inflows(Dividend)                     1.00            0.8772                           2.64                             2.32 Cash inflows(Dividend)                     2.00            0.7695                           3.25                             2.50 Cash inflows(Dividend)                     3.00            0.6750                           3.71                             2.50 Cash inflows(Dividend)                     4.00            0.5921                           4.23                             2.50 Cash inflows(Dividend)                     5.00            0.5194                           4.82                             2.50 PV of Cash Inflows                           12.33

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