a. When computing the price of the stock with the dividend discount model, how would the price

Question:

a. When computing the price of the stock with the dividend discount model, how would the price of a stock be affected if the required rate of return is increased. Explain the logic of this relationship.

b. When computing the price of a stock using the constant-growth dividend discount model, determine how the price of a stock would be affected if the growth rate is reduced. Explain the logic of this relationship.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...