$9.$ Muscle Motors, a car company specializing in vintage cars, just paid a dividend

on its common stock of $$2\mathrm{.}50/$share$.$ The required return of the company$$s

common stock is $15\%$

a$)$ Calculate the price of its common stock if dividends grow at $0\%$ per year

b$)$ Calculate the price of its common stock if dividends grow at an annual rate of

$3\mathrm{.}25\%.$

c$)$ Calculate the price of its common stock if dividends grow at an annual rate of

$5\%$ for the first three years; followed by $2\mathrm{.}5\%$ annual growth thereafter. Hint:

Use a timeline showing the dividends in each year and then calculate the

present value.