According to the Gordon Growth Model, the price of stocks depend on the following except:
A. Return on Treasure bills
B. Required return on investments
C. Expected constant growth rate in dividends
D. The most recent dividend paid
When your required return on an equity investment decreases, the according to the Gordon Growth Model you will be willing to pay ____ (more, less, equal amount) for the investment.
Suppose that a stock is expected to pay a $2 dividend next year, that the dividend is expected to grow at 2% per year, and that your required return on this equity investment is 7%. Using the Gordon growth model, the price you would be willing to pay for the stock is ____ (Round answer to the nearest two decimal points)