A firm's cost of equity is 15%. Their current dividend is $2.00 per year and this dividend is expected to grow at 7% per year forever.

a. What does the Gordon Growth model imply you should be willing to pay for the stock?

b. Create a data table for the stocks value for different dividend growth rates (0 - 20%, by 2% increments) and costs of equity (14 - 24%, by 1%). For negative values, use IF statement to indicate "N/A"

c. How does the price change with g and re increases? please use excel

Growth rate 00 0^ 32 3 03 00