***Could you please double check this. This question was asked 4 days ago to a tutor, but I feel as if the tutor made an honest mistake for A) it seems year 6,7,8 are inconsistent with the formula. Could you look at my question and then double check the answer. Thank you.****

This question has my original question then it has the tutors answer. I can't get the same answer for A) year 6,7,8 using the formula provided in their excel sheet.**

**Original Question**

''Question:**Could you please help me with this. Show me the formula for the first, just so I can understand which formulas to use for future questions. Thanks**

You are considering an investment in the shares of Kirk's Information Inc. The company is still in its growth phase, so it won't pay dividends for the next few years. Kirk's accountant has determined that their first year's earnings per share (EPS) is expected to be $20. The company expects a return on equity (ROE) of 25% in each of the next 5 years but in the sixth year they expect to earn 20%. In the seventh year and forever into the future, they expect to earn 15%. Also, at the end of the sixth year and every year after that, they expect to pay dividends at a rate of 70% of earnings, retaining the other 30% in the company. Kirk's uses a discount rate of 15%.

1. Fill in the missing items in the following

table:

Year EPS ROE Expected Dividend Present Value Of (end of year) Dividend (at time 0) YOUAWNHO n/a n/a n/a 1/a 20 25% 25 = 1.25 * 20 25% 31.25 = 1.25 * 25 25% 39.07 = 1.25*31.25 25% 48.83 = 1.25*39.07 25% 58.60 = 1.20*48.83 20% 67.40 = 1.15*58.604 15% 8 77.50 = 1.15*67.40 15% ?