Valuation of a constant growth stock
Investors require a 15% rate of return on Levine Company's stock (that is, rs = 15%).
What is its value if the previous dividend was D0 = $1.00 and investors expect dividends to grow at a constant annual rate of (1) -7%, (2) 0%, (3) 6%, or (4) 11%? Round answers to the nearest hundredth.