ols Assignment 2 (opt... BUSI 2121 Case... tructions: This assignment can be done in groups or individually. Only one assignment should be submitted by your group (if you choose to do it in group). The cover page should contain the name and st Answer all questions . Assignment should be submitted on CUleam (into the Assignment Dropbox) . The assignment is due by 27 March 2018. Late assignment will NOT be accepted 1. Stock valuation (20 marks) Mylex Inc has just released an improved version of its popular sporting product and the world is beating a path to its door. As a result, the firm projects growth of 20% per year for the next four years. Competition in the product market is expected to drive down profit margins, and hence the sustainable growth rate will fall to 5% after four years. The most recent(ie year o) earnings were $4 per share. The finn has a dividend payout ratio of 25% and its discount rate is 10%. i) What is the value of the stock price today? ii) What is the expected stock price four years from now? iii) If you decide to hold the stock for one year, at what price can you sell the stock? (10 marks) (2 marks) (4 marks) (4 marks) iv) If you buy the stock now and sell it in 1 year, what will be your rate of retum? Question 2: Project Evaluation (Capital Budgeting Analyses) 40 marks 0). Consider a ten-year project that costs $40.000 today, which is expected to generate $6,.000 at the end of the second year and then the cash lows will increase by $1.000 for three years and then stagnate for the rest of the project life. The cost of capital is 8 percent. What is the project's NPV? What is discounted 5 marks) MacBook Air