Investors require a 6% rate of return on Levine company's stock (l.e., Is = 6%). a. What is its value if the previous dividend was Do = $2.50 and investors expect dividends to grow at a constant annual rate of (1) -6%, (2) 0%, (3) 3%, or (4) 5%? Do not round intermediate calculations. Round your answers to the nearest cent. (1) $ (2) $ ad b. Usine data from part,o, what would the Gordon (constant growth) model value be in the required rate of return was 15% and the expected growth rate was (1) 15 or (2) 20%? Are these reasonable results? 1. These results show that the formula makes sense if the required rate of retum is equal to or greater than the expected growth rate 11. These results show that the formula does not make sense if the expected growth rate is equal to or less than the required rate of II. These results show that the formule does not make sense if the required rate of return is equal to or less than the expected growth TV. These results show that the formule does not make sense if the required rate of retum is equal to or greater than the expected V. These results show that the formula makes sense if the required rate of retum is equal to or less than the expected growth rate. return; rate. c. is it reasonable to think that a constant growth stock could have 9 > TS! 1. It is not reasonable for a firm to grow indefinitely at a rate lower than its required return. 11. It is not reasonable for a firm to grow indefinitely at a rato equal to its required return 111. It is not reasonable for a hem to grow indefinitely at a rate higher than its required return. IV. It is reasonable for a firm to grow indefinitely at a rate higher than its required return. V. It is not reasonable for a firm to grow even for a short period of time at a rate higher than its required return. Select