Constant Growth Stock Valuation
Investors require a 16% rate of return on Brooks Sisters' stock (rs = 16%).
What would the value of Brooks's stock be if the previous dividend was D0 = $3.25 and if investors expect dividends to grow at a constant compound annual rate of (1) - 5%, (2) 0%, (3) 7%, or (4) 13%? Round your answers to the nearest cent.
1)_______$
2)________$
3)________$
4)________$