Share A is forecast to deliver the following dividends: year one $4; year two $5; year three $6. Analysts forecast that the dividend will grow 3% thereafter. The appropriate discount rate is 6%.

a) Using the Gordon growth model, estimate the share price?

b) If analysts decided that the discount rate should be increased by 1%, and the forecasted constant growth rate should be increased by 1%, would the estimated share price rise or fall?