Question: Note that your Assignments Add-in will be closed at 10:05 am Problem -1- (11 points). The Club Auto Parts Company has just recently been organized.

 Note that your Assignments Add-in will be closed at 10:05 am

Note that your Assignments Add-in will be closed at 10:05 am Problem -1- (11 points). The Club Auto Parts Company has just recently been organized. It is expected to experience no growth for the next 2 years as it identifies its market and acquires its inventory. However, Club will grow at an annual rate of 5% in the third year and, beginning with the fourth year, should attain a 10% growth rate which it will sustain thereafter. The first dividend (D1) to be paid at the end of the first year is expected to be $0.50 per share. Investors require a 15% rate of return on Club's stock. A-What is the net present value (NPV) of the stock price? (5 points) B-What will Club's stock price be at the end of the first year (P1)? (2 points) c. What dividend yield should an investor in Club expect for the first year knowing that: Dividend Yield =D1/P. (2 points) D. If you planned to sell the stock immediately after the year 2 dividend was paid, how much would you expect to receive? (2 points)

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