Firm A currently has earnings per share of $10. It has no growth and pays out all earnings as dividends. So it is a cash cow now. There is a new project that will require an investment of $2 per share in one year. The project is only a two-year project, and it will increase earnings in the two years following the investment by $3 and $4, respectively. Investors require a return of 10% firm A's stock.

a) What is the value per share of the firm's stock assuming the firm does not undertake the investment opportunity?

b) If the firm does undertake the investment, what is the value per share now?

c) Again, assume the firm undertakes the investment. What will the price per share be five years from today? Explain.