1. If a certain corporation just recently paid a dividend of $3.70, and the dividend is...

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1. If a certain corporation just recently paid a dividend of$3.70, and the dividend is expected to grow at 4% for a long timeinto the future, calculate the price of this company’s stock atrequired returns of 8%, 10% and 12%. Then using a 10% requiredreturn, calculate the price at growth rates of 2%, 5% and 8%.Discuss what you see in the behavior of the prices in response tochanges in the growth rate and changes in the required return.Using the price you calculated with a 4% growth rate and a 10%required return, what would be the expected dividend and price fiveyears from today?

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1. If a certain corporation just recently paid a dividend of$3.70, and the dividend is expected to grow at 4% for a long timeinto the future, calculate the price of this company’s stock atrequired returns of 8%, 10% and 12%. Then using a 10% requiredreturn, calculate the price at growth rates of 2%, 5% and 8%.Discuss what you see in the behavior of the prices in response tochanges in the growth rate and changes in the required return.Using the price you calculated with a 4% growth rate and a 10%required return, what would be the expected dividend and price fiveyears from today?