15. The investment banking firm of Luther King, Inc., will use a dividend valuation model to appraise the shares of the Pyramid Corporation. Dividends (DL) at the end of the current year will be $1.20. The growth rate (g) is 9 percent and the discount rate (Kg) is 13 percent.

a. Using Formula 10-9 on page 300 from Chapter 10, what should be the price of the stock to the public?

b. If there is a 6 percent total underwriting spread on the stock, how much will the issuing corporation receive?

c. If the issuing corporation requires a net price of $29 (proceeds to the corporation)

and there is a 6 percent underwriting spread, what should be the price of the stock to the public? (Round to two places to the right of the decimal point.)