Company DCS has paid a dividend for many years. Its most recent annual dividend was $4.25, which was paid at the end of 2016. The risk-free rate is 1.5%, the current MRP is 7.2%, and the Beta for DCS is .8.
a) What would be the value of a share of DCS under the no-growth assumption?
b) If a 2% dividend growth rate were to be assumed, what would be the value of a share of DCS under the constant-growth assumption?