The Mini-DV Tape Production Company is facing decreased sales due to the continual trend toward the use of flash storage devices to capture videos. Based on the most recent long-term earnings forecasts, it is anticipated that dividends will decline at a rate of 10% annually, forever. The firm just paid a dividend of $4.25 and the required return on the stock is 15%.

a) At what price should the stock sell for today?

b) At what price should the stock sell for 4 years from today?

c) Explain why an investor would still be interested in purchasing the stock today if they know the stock price will only decrease over time?