Changes in Growth and Stock Valuation Consider a firm that had been priced using a 6 percent growth rate and a 9 percent required rate. The firm recently paid a $.70 dividend. The firm has just announced that because of a new joint venture, it will likely grow at a 8 percent rate. How much should the stock price change (in dollars and percentage)?
$50.87, 206%
$46.67, 62%
$50.87, 67%
$46.67, 162%