Horse and Buggy Inc. is in a declining industry. Sales, earnings, and dividends are all shrinking at a rate of 5% per year.

a.	If r = 10% and DIV1 = $3, what is the price of a share? (Do not round intermediate calculations.)

Price of a share

$

b.	What price do you forecast for the stock one year from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Stock price

$

c.	What is the cost of capital on the stock? (Do not round intermediate calculations.)

Cost of capital

%