Constant Growth Stock Valuation Investors require a 12% rate of return on Brooks Sisters' stock (rs = 12%). a. What would the estimated value of Brooks' stock be if the previous dividend was Do = $1.25 and if investors expect dividends to grow at a constant annual rate of (1) - 5%, (2) 0%, (3) 7%, or (4) 12%? Do not round intermediate calculations. Round your answers to the nearest cent. 1. $ 6.99 2. $ 10.42 3. $ 26.75 4. $ b. Using data from Part a, what is the constant growth model's estimated value for Brooks Sisters' stock if the required rate of return is 12% and the expected growth rate is (1) 12% or (2) 13%? Are these reasonable results? Round your answers to the nearest cent. Use a minus sign to enter negative values, if any. If your answer is zero, enter "0". 1. Po: $ No, it is not a reasonable result, because in this case the value of stock is undefined. 2. Po: $ No, it is not a reasonable result, because in this case the value of stock is negative, which is nonsense. V C. Is it reasonable to expect that a constant growth stock would have g_>rs? No