Consider the following three stocks:

Stock $A$ is expected to provide a dividend of $$12\mathrm{.}00$ a share forever.

Stock $B$ is expected to pay a dividend of $$7\mathrm{.}00$ next year. Thereafter, dividend growth is expected to

be $4\mathrm{.}00\%$ a year forever.

Stock $C$ is expected to pay a dividend of $$4\mathrm{.}00$ next year. Thereafter, dividend growth is expected to

be $20\mathrm{.}00\%$ a year for five years $($years $2$ through $6,$ as $C$ recovers from a severe recession$)$ and zero

thereafter.

a$-1.$ If the cost of equity for each stock is $12\mathrm{.}00\%,$ what is the stock price for each of the stocks?

a$-2.$ Which stock is the most valuable?

b$-1.$ If the cost of equity for each stock is $7\mathrm{.}00\%,$ what is the stock price for each of the stocks?

b$-2.$ Which stock is the most valuable?

Complete this question by entering your answers in the tabs below.

Req A$1$

Req $A2$

If the cost of equity for each stock is $12\mathrm{.}00\%,$ what is the stock price for each of the stocks?

Note: Do not round intermediate calculations. Round your answers to $2$ decimal places.