a. Calculate price of common stock if the company’s EPS last year were $5 per share and its dividend payout ratio is 30 percent. Its earnings are expected to grow at the rate of 10 percent forever. The market required rate of return is 12 percent.

b. Recalculate price if the investors now demand a 10 percent rate of return assuming that the remaining information from part a is same.

c. Recalculate price if growth rate is -5.5 percent assuming that the remaining information from part a is same.

d. Recalculate price if the required rate of return is 8 percent assuming that the remaining information from part a is same.