Problem 11-01

The dividend-growth model may be used to value a stock:

Round your answers to the nearest cent.

What is the value of a stock if: D0 = $4.50 k = 12% g = 6% $

What is the value of this stock if the dividend is increased to $5.60 and the other variables remain constant? $

What is the value of this stock if the required return declines to 8 percent and the other variables remain constant? $

What is the value of this stock if the growth rate declines to 4 percent and the other variables remain constant? $

What is the value of this stock if the dividend is increased to $5.00, the growth rate declines to 4 percent, and the required return remains 12 percent? $