Question: a. What is its value if the previous dividend was D=51.50 and investors expect dividends to grow at a constant annual rate of (1) 4%,

 a. What is its value if the previous dividend was D=51.50

a. What is its value if the previous dividend was D=51.50 and investors expect dividends to grow at a constant annual rate of (1) 4%, (2) 0%, (3) 3%, or (4) 6% ? Do no round intermediste ealculations. Round your answers to the nearest cent: (1) 5 (2) 3 (3) 3 (4) 3 b. Using dats from part a, what would the Gordod (constant growth) model volue be if the required rate of retum wos 8% and the expected gromth rate was (1) 8 * or (2) 12% Round your answers to the nearest cent. if the value is undefined, enter N/A. (1) 5 (2) 5 Are these reasonable results? 1. These results show that the formula does not make sense if the required rate of iptum is equal to or greater than the expected gronth rate. II. These results show that the formuls makes sense if the required rate of return is equel to or less than the expected growth rate. III. These resuits show that the formula makes sense if the required rate of retum is ecual to or greater than the expected growth rate. IV. These results show that the formula does not make sense if the expected gromth rate is equal to or less than the required rate of teturn. V. These results show that the formula does not make sense if the required rate of return is equal to or less then the expected growth rate. c. Is it reasensble to think that a constant grewth stock could have gn? ? I. It is not reasonabin for a firm to grow indefiniteir at a rate lower than as required return. II. It is not reasonatie for a firm to grow indefritely at a rate equal to its required intum. III. tt is not reasonable for a firm to grew indefinitely at s rate higher than is regured return. Iv. It is reasonable for a firm to grow indefinitely at a rate higher than its requied ceturn: V. It is not reasonabie for a firm to grow even fer a short period of time at a rae Nigher than its required return

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