Math Problem Solver

Assume that it is now January 1, 2009. Wayne-Martin Electric Inc. (WME) has developed a solar panel capable of generating 200% more electricity than any other solar panel currently on the market. As a result, WME is expected to experience a 15% annual growth rate for the next 5 years. Other firms will have developed comparable technology at the end of 5 years, and WME’s growth rate will slow to 5% per year indefinitely. Stockholders require a return of 12% on WME’s stock. The most recent annual dividend (D 0), which was paid yesterday, was $1.75 per share.a. Calculate WME’s expected dividends for 2009, 2010, 2011, 2012, and 2013.b. Calculate the value of the stock today, P^0.c. Calculate the expected dividend yield (D 1 /P0), capital gains yield, and total return (dividend yield plus capital gains yield) expected for 2009.