The general Cereal common stock dividends have been growing at annual rate of 7% per year over the past 10-years. Current dividend (D0) is $1.70 per share. Determine the current value of a share of this stock to the investor who needs a 12% rate of return if the given conditions exist:
a) Dividends are predicted to continue growing at the historic rate for foreseeable future.
b) The dividend growth rate is expected to rise to 9% per year.
c) The dividend growth rate is expected to reduce to 6.5% per year.