You are given the following data: Required return 10% Present dividend $ 1 Growth rate 5%
a) What is the value of the stock?
b) If the growth rate increases to 6 percent and the dividend remains $ 1, what is the value of the stock?
c) If the required return declines to 9 percent and the dividend remains $ 1, what is the value of the stock? If the stock is selling for $ 20, what does that imply?