Gamer Inc. just paid a dividend of $4 and anticipates increasing its dividend at a constant rate of 5% per year, indefinitely. Further, the return required by shareholders is 17%. According to the Gordon Model, what is the price of this firm's common stock? Value = De*(1 + g) k-g = D kog What if in your estimation, the risk of Gamer Inc. has dropped substantially and now your new required rate of return is 10%. What would be the new value of the Gamer Inc.? Value = D. *(1+0) k-g Di k-g = So based on this result, as required rate of return increases, price And, as required rate of return decreases, price