Changes in Growth and Stock Valuation Consider a firm that had been priced using a 8 percent growth rate and a 11 percent required rate. The firm recently paid a $1.60 dividend. The firm has just announced that because of a new joint venture, it will likely grow at a 9 percent rate. How much should the stock price change (in dollars and percentage)?
$29.60, 34%
$29.60, 51%
$16.80, 519%
$16.80, 19%