Question: Computation Question 2: (15 pts) Blue Hens Inc. has just paid $10 dividend per share. For the next 5 years, dividends will grow at the

Computation Question 2: (15 pts) Blue Hens Inc. has just paid

$10 dividend per share. For the next 5 years, dividends will grow

Computation Question 2: (15 pts) Blue Hens Inc. has just paid $10 dividend per share. For the next 5 years, dividends will grow at the rate of 10% a year. After year 5, dividend growth will slow down to 5% a year forever. The discount rate is 15%. What is Blue Hens Inc.'s current stock price? Computation Question 3: (18 pts) MLB's current return on equity (ROE) is 25%, and it pays out 40% of its earnings as dividends. As of this moment, the company's book value of equity per share is $60. Assume that the ROE and payout ratio should stay constant for the next three years, after which the ROE will drop to 10% and the payout ratio will increase to 80%. The cost of capital is 20%. What is MLB's stock price today

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