Part One: IBM stock will pay a $$12$ per share annual dividend in perpituity. If investors require a $15\%$ rate of return, what

should be the price of this stock today?

Part Two: If IBM is expected to pay a $$12$ dividend next period and dividends are expected to grow at $4$ percent annually, what

should be the price of this stock today if investors require a $15$ percent rate of return?

Part Three: If IBM is expected to pay a $$12$ dividend next period and dividends are expected to grow at at $4$ percent annually

for the next two years and then fall to a constant $3$ percent annual growth rate, what should be the price of this stock today if

investors require a $15$ percent rate of return?

Part Four: If IBM is currently trading at $$125$ per share, would you recommend buing the stock under the assuptions of Part

One, Part Two, or Part Three?