Problem:
Brushy Mountain Mining Company's coal reserves are being depleted, so its sales are falling. Also, environmental costs increase each year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 3% per year. If D0 = $3 and rs = 11%,
Required:
Question 1: What is the value of Brushy Mountain's stock? Explain in detail.