PROBLEM $1$: Week $3$ and Week $4$ Equity Financing$$ Liberty Rehab Corporation has a current stock price of $$56,$ and its last dividend $($D$0)$ was $$ $$5\mathrm{.}00.$ In view of the company's strong financial position, its required rate of return is $10$ percent. If Liberty's $$ dividends are expected to grow at a constant rate in the future, what is the firm's expected stock price in $$ five years? Constant Growth rate formula is g$=$D$1/$D$0-1$ Where D$1$ is next year's dividends $$ Stock price in $5$ years will be P$5=$D$6/($r$-$g$)$ where D$6=$D$0$ x $(1+$ g$)^6$ and r $=10\%$ or $0\mathrm{.}10$ Constant Growth Rate:$$ Expected Stock Price in $5$ Years:$$ PROBLEM $2$: Week $3$ and Week $4$ Equity Financing$$ Your personal financial advisor is trying to get you to buy the stock of Eagle Healthcare, a $$ local drug and alcohol rehabilitation company. The stock has a current market price of $$35,$ its last dividend $($D$0)$ was $$2\mathrm{.}50,$ and the company's earnings and dividends are expected to increase at a constant growth rate of $8$ percent. The $$ required return on this stock is $15$ percent. From a strict valuation standpoint, should you buy the $$ stock? $$ Include the solution for deciding to buy or not buy the stock.$$