Horse and Buggy Inc. is in a declining industry. Sales, earnings, and dividends are all shrinking at a rate of 10% per year.

A. If r = 20% 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____%