Horse and Buggy Inc. is in a declining industry. Sales, earnings, and dividends are all shrinking at a rate of 6% per year.

a.	If r = 10% and DIV1 = $8, what is the value of a share? (Do not round intermediate calculations.)

Value of a share

$

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

Stock price

$

c.	What is the expected rate of return on the stock? (Do not round intermediate calculations.)

Expected rate of return

%