ZAR Electric Inc. (ZE) has developed a solar panel capable of generating 200% more electricity than any other solar panel currently on the market. As a result, ZE is expected to experience a15% annual growth rate for the next 5 years. Other firms will have developed comparable technology at the end of 5 years, and ZEs growth rate will slow to 5% per year indefinitely. Stockholders require a return of 12% on ZEs stock. The most recent annual dividend (D0), which was paid yesterday, was $1.75 per share.

10. What is the present value of the dividends in the non-constant growth period? *

A) $13.56

B) $9.46

C) $8.75

D) None of the above

11. What is the present value of the dividends in the constant growth period? *

A) $52.8

B) $26.25

C) $29.96

D) None of the above

12. What is the value of a share of ZE's stock today? *

A) $66.36

B) $35

C) $39.42

D) None of the above