Problem:

Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $3.00 next year. The growth rate in dividends for all three companies is 7 percent. The required return for each company's stock is 8.40 percent, 11.50 percent, and 14.60 percent, respectively.

Required:

Question 1: What is the stock price for Red. Inc., Company?

Question 2: What is the stock price for Yellow Corp. Company?

Question 3: What is the stock price for Blue Company?

Note: Please show how to work it out.