Question: Using Dividend Discount model solve the following problems. Show all calculations. a) Suppose that a stock pays three annual dividends of $100 per year and

Using Dividend Discount model solve the following problems. Show all calculations.

a) Suppose that a stock pays three annual dividends of $100 per year and the discount rate k=15 percent. What is the price of the stock today?

b) Suppose that a stock pays three annual dividends of $10, $20, and $30 in the years 1, 2, and 3 respectively and the discount rate is k=10 percent. What is the price of the stock today?

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