Ecology Labs Inc. will pay a dividend of $6.40 per share in the next 12 months (D₁). The required rate of return (K_e) is 14 percent and the constant growth rate is 5 percent. (Each question is independent of the others.)

a. Compute the price of Ecology Labs' common stock.

Price:

b. Assume K_e, the required rate of return, goes up to 18 percent. what will be the new price?

New price:

c. Assume the growth rate (g) goes up to 9 percent. what will be the new price? K_egoes back to its original value of 14 percent.

New price:

d. Assume D₁ is $7.00. what will be the new price? Assume K_e is at its original value of 14 percent and g goes back to its original value of 5 percent.

New price: