Investors require a 16% rate of return on Brooks Sisters' stock (rs = 16%).

What would the estimated value of Brooks' stock be if the previous dividend was D0 = $1.50 and if investors expect dividends to grow at a constant annual rate of (1) - 5%, (2) 0%, (3) 3%, or (4) 13%? Do not round intermediate calculations. Round your answers to the nearest cent. $

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Using data from Part a, what is the constant growth model's estimated value for Brooks Sisters' stock if the required rate of return is 16% and the expected growth rate is (1) 16% or (2) 21%? Are these reasonable results? Round your answers to the nearest cent. Use a minus sign to enter negative values, if any. If your answer is zero, enter "0". : $

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: $

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Is it reasonable to expect that a constant growth stock would have gL > rs?