A stock has just paid a dividend of $10 per share. The required rate of return is 17%, and the expected constant growth rate is 7%. What is the stock's expected price?

Select one:

a. $105.22

b. $106.75

c. $109.84

d. $110.29

e. $107

Suppose that a company has a major change in its investment policy and as a consequence, the beta of its common stock decreases. Assuming that other factors remain constant, will this change raise or lower the expected price of the stock?

Select one:

a. lower

b. Raise

PPLG Company just paid a dividend of $3 per share. You believe that the dividend growth rate will be 10% for the next two years and the selling price of the stock will be $45 at the end of year 2. What is the maximum price you are willing to pay for the stock if you require a 15% return?

Select one:

a. $41.08

b. $37.71

c. $39.64

d. $38.28

e. $36.41