(Constant growth model) Medtrans is a profitable firm that isnot paying a divide

(Constant growth model) Medtrans is a profitable firm that isnot paying a dividend on its common stock. James Weber an analystfor A. G. Edwards believes that Medtrans will begin paying a $1.00per share dividend in two years and that the dividend will increase6% annually thereafter. Bret Kimes one of James colleagues at thesame firm is less optimistic. Bret thinks that Medtrans will beginpaying a dividend in four years that the dividend will be $1.00and that it will grow at 4% annually. James and Bret agree that therequired return for Medtrans is 13%.