Question
Ecology Labs Incorporated will pay a dividend of $3.55 per share in the next 12 months (D1)(1) . The required rate of return (Ke)() is
Ecology Labs Incorporated will pay a dividend of $3.55 per share in the next 12 months (D1)(1) . The required rate of return (Ke)() is 20 percent and the constant growth rate is 10 percent.
Note: Each question is independent of the others.
Compute the price of Ecology Labs' common stock.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Assume Ke , the required rate of return, goes up to 22 percent. What will be the new price?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Assume the growth rate (g) goes up to 14 percent. What will be the new price? Ke goes back to its original value of 20 percent.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Assume D11 is $4.20. What will be the new price? Assume Ke is at its original value of 20 percent and g goes back to its original value of 10 percent.
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
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