9-10 VALUATION OF A DECLINING GROWTH STOCK Martell Mining Company's ore rese ves are being depleted, so its sales are falling. Also, because its pit is getting deeper each year, scots are rising. As a result, the company's earnings and dividends are declining at the constit rate of 5% per year. If Do = $5 and rs = 15%, what is the value of Martell Mining's stock VALUATION OF A CONSTANT GROWTH STOCK A stock is expected to pay a dividend of $0.50 at the end of the year (i.e., D1 = 0.50), and it should continue to grow at a constant rate of 7% a year. If its required return is 12%, what is the stock's expected price 4 years from today? 9-11