Dividend Discount Model. Integrated Potato Chips just paid a $$1$ per share dividend. You expect the dividend to grow steadily $$ at a rate of $4\%$ per year. $($ LO$7-2)$

a$.$ What is the expected dividend in each of the next three years?

b$.$ If the discount rate for the stock is $12\%,$ at what price will the stock sell?

c$.$ What is the expected stock price three years from now?

d$.$ If you buy the stock and plan to sell it three years from now, what are your expected cash flows in $($i$)$ year $1$; $($ii$)$ year $2$; $($iii$)$ year $3?$

e$.$ What is the present value of the stream of payments you found in part $($d$)?$ Compare your answer to part $($b$).$