A firm pays a $1.50 dividend at the end of year one (D₁), has a stock price of $99 (P₀), and a constant growth rate (g) of 5 percent.

a.Compute the required rate of return (K_e).(Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

Indicate whether each of the following changes will increase or decrease the required rate of return (K_e). (Each question is separate from the others. That is, assume only one variable changes at a time.) No actual numbers are necessary.

b.If the dividend payment increases:

c.If theexpected growth rate increases:

d.If the stock price increases: