Q1: XYZ common stock that pays dividends at the end of each year into perpetuity. Assume that the dividend is constant, and that the effective rate of interest is 10%. Also assume that the XYZ stock price is determined by the dividend discount model. ii) Estimate the change in XYZ stock price using a first order Modified duration estimate if the effective rate of interest decreases to 9%. Estimate the change in XYZ stock price using a first order Macaulay duration estimate if the effective rate of interest decreases to 9%. Calculate the actual XYZ stock price if the effective interest rate is 9%. Which estimate is closer to the actual price? iii) Q1: XYZ common stock that pays dividends at the end of each year into perpetuity. Assume that the dividend is constant, and that the effective rate of interest is 10%. Also assume that the XYZ stock price is determined by the dividend discount model. ii) Estimate the change in XYZ stock price using a first order Modified duration estimate if the effective rate of interest decreases to 9%. Estimate the change in XYZ stock price using a first order Macaulay duration estimate if the effective rate of interest decreases to 9%. Calculate the actual XYZ stock price if the effective interest rate is 9%. Which estimate is closer to the actual price? iii)