Problem:
Investors require a 18% rate of return on Brooks Sisters' stock (rs = 18%). What would the value of Brooks's stock be if the previous dividend was D0 = $2.75 and if investors expect dividends to grow at a constant compound annual rate of (1) - 4%, (2) 0%, (3) 3%, or (4) 12%? Please provide all description.
A. 1.$
B. 2.$
C. 3.$
D. 4.$