Buffalo Cow Chips is presently in a stage of abnormally high growth because of a surge in the demand for Buffalo Cow Chips. The company expects earnings and dividends to grow at a rate of 9% for the next 3 years, after which time they expect growth to level off at 3% for the long-term (for both earnings and dividends). The company expects dividend (DPS - to be paid) are $1.75. Buffalo Cow Chips has a beta of 1.0, the return on the market is 9%, and the risk-free rate is 3%.

a)What is BCC's cost of capital?

b)What equation did you use to find the cost of capital?

c)What is the sum of cash flows to stock holders for years 1, 2, 3, 4

d)What is the PV of cash flows for years 1, 2, 3, 4

e)What is the price per share of common stock