The management team at Coles proceeds to work on valuing the companys stock (per share). The company just paid a dividend of $1.18 per share to its shareholders. The companys required return on equity is 10.00%. Estimate the per share value of Coles stock under the two following scenarios for expected dividend growth:

constant growth rate of 7.0%. (5 points)

three years of 6.0% dividend growth followed by constant growth of 7.0%. (5 points)

ANSWER TO Question 2a:

Value = $ _____________

ANSWER TO Question 2b:

Value = $ _____________

c .Compare your estimates to the two questions above, and evaluate why there is a difference. If you had to choose which answer above is more correct, which would you choose? HINT: Its a good idea to use one of your answers from Question 1 in the process of answering this question. (4 points)