B20. (Constant growth model) Medtrans isa profitable firm that is not paying a d

B20. (Constant growth model) Medtrans isa profitable firm that is not paying a dividend on its commonstock. James Weber an analyst for A. G. Edwards believes thatMedtrans will begin paying a $1.00 per share dividend in two yearsand that the dividend will increase 6% annually thereafter. BretKimes one of James colleagues at the same firm is lessoptimistic. Bret thinks that Medtrans will begin paying a dividendin four years that the dividend will be $1.00 and that it willgrow at 4% annually. James and Bret agree that the required returnfor Medtrans is 13%.