Question: Problem 8-31 Changes in Growth and Stock Valuation (LG8-5) Consider a firm that had been priced using a 12 percent growth rate and a 14

Problem 8-31 Changes in Growth and Stock Valuation (LG8-5)

Consider a firm that had been priced using a 12 percent growth rate and a 14 percent required return. The firm recently paid a $1.35 dividend. The firm just announced that because of a new joint venture, it will likely grow at a 12.5 percent rate.

How much should the stock price change (in dollars and percentage)? (Round your answers to 2 decimal places.)


Change in stock price	$
Change in stock percent	%

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