Problem 7-12 Dividend Discount Model (LO2) Integrated Potato Chips just paid a $1.6 per share dividend. You expect the dividend to grow steadily at a rate of 4% per year. a. What is the expected dividend in each of the next 3 years? b. If the discount rate for the stock is 12%, at what price will the stock sell today? c. What is the expected stock price 3 years from now? d. If you buy the stock and plan to sell it 3 years from now, what are your expected cash flows in (1) year 1; (ii) year 2; (iii) year 3? e. What is the present value of the stream of payments you found in part (d)? Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Req A Req B and C Reg D Req E What is the expected dividend in each of the next 3 years? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected Dividend Year 1 Year 2 Year 3 Req B and C > Complete this question by entering your answers in the tabs below. es Reg A Req B and C Reg D Red E If the discount rate for the stock is 12%, at what price will the stock sell today and what is the expected stock price 3 years from now? (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. Current price c. Future price Complete this question by entering your answers in the tabs below. es Reg A Req B and C Reg D Reg E If you buy the stock and plan to sell it 3 years from now, what are your expected cash flows in (i) year 1; (ii) year 2; (iii) year 3? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Year 1 Year 2 Year 3 Dividend Sale of stock Total cash flow Complete this question by entering your answers in the tabs below. s Req A Req B and c Reg Req E What is the present value of the stream of payments you found in part (d)? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Year 1 Year 2 Year 3 PV of cash flow