26. Friedman Steel Company will pay a dividend of $1.50 per share in the next 12 months (D). The required rate of return(K) is 10 percent and the constant growth rate is 5 percent a. Compute P, (For the remaining questions in this problem, all variables remain the same except the one specifically changed. Each question is independent of the others.) b. Assume K, the required rate of return, goes up to 12 percent, what will be the new value of P? c. Assume the growth rate (g) goes up to 7 percent, what will be the new value of P? d. Assume D, is $2, what will be the new value of P,? 27. The Fleming Corporation paid a dividend of $4 last year. Over the next 12 months, the dividend is expected to grow at 8 percent, which is the constant growth rate for the firm. The new dividend after 12 months will represent D. The required rate of return is 13 percent. Compute the price of a common share. 28. Rick's Department Stores has had the following pattern of earnings per share over the last five years: Year Earnings per Share 2011 $4.00 2012 4.20 2013 4.41 2014 4.63 2015 4.86 The earnings per share have grown at a constant rate (on a rounded basis) and will continue to do so in the future. Dividends represent 40 percent of earnings. a. Project earnings and dividends for the next year (2016). Round all values in this problem to two places to the right of the decimal point. b. If the required rate of return is 13 percent, what is the anticipated share price at the beginning of 2016? 29. A firm will pay a $4.00 dividend at the end of year one, has a share price of $50, and a constant growth rate of 5 percent. Compute the required (expected) rate of return