Question: 13. Dividends for first, second and third year, are expected in the amount of $1, $2, $2.5 respectively. And after that dividends will grow at

13. Dividends for first, second and third year, are expected in the amount of $1, $2, $2.5 respectively. And after that dividends will grow at a constant rate of 5% per year. Required rate of return is 10%. Compute the value of stock at time zero.

14. Describe the profitability index, how it is used and which drawbacks it may have compared to the NPV.

Could you please help me sove these two questions? Thank you!

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