Consider a firm that had been priced using a 12 percent growth rate and a 14 percent required return. The firm recently paid a $1.10 dividend. The firm just announced that because of a new joint venture, it will likely grow at a 12.5 percent rate.
How much should the stock price change (in dollars and percentage)?
Calculate the present value of these cash flows using a 10 percent discount rate. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)