Outback Outfitters is expected to pay a dividend (D1) of $1.00 next year, with an expected constant growth in dividends of 5%. The required rate of return is 11%.
- Calculate the present value of this stock.
- What will be the new price of this stock if the discount rate rises to 12%?
- What will be the new price of this stock if the discount rate falls to 10%?