A)The required return for PEL's stock is 12%, and the stock sells for $40 per share. The firm just paid a dividend of $1.00, and the dividend is expected to grow by 30% per year for the next 4 years, so D4 = $1.00(1.30)4 = $2.8561. After t = 4, the dividend is expected to grow at a constant rate of X% per year forever. What is the stock's expected constant growth rate after t = 4, i. e., what is X? (Hint: Solve for the long-run growth rate first. Forecast the dividends in Years 1-4, so they are inserted in the timeline. You need a growth rate to find D5 and the TV. Begin with a guess of say 5.0%, then find the PV of the forecasted CFs and sum them. If the sum equals the given price, then your growth rate would be correct. If not, you need to substitute in different g's until we find the one that works).