Question #5: Multi-Stage Growth Model (20 Points (a) Union Pacific currently does not pay a dividend and you don't expect the company to pay dividends for the next 7 years. However, in Year 7, you expect that the company will begin paying a dividend of $3 per share, and you expect dividends to grow indefinitely at a 4.3% rate per year thereafter. If the required rate of return is 14 percent, how much is the stock currently worth? [8 Points] (b) Ferrari NV just paid a dividend of do = $1.30 per share. The dividends are expected to grow at a rate of 22 percent for the next five years and then level off to a 3.2 percent growth rate indefinitely. If the required rate of return is 11 percent, what is the value of the stock today? [12 Points]