You are a financial executive for Dunder Mifflin. Your boss, David Wallace, wants you to estimate theprice of the companys stock. Currently, the company does not pay dividends. However, due to newrevenues from the acquisition of Prince Paper, the company expects to pay its first dividend of $0.50 in 3years. After that, they will increase dividends by 80% per year for 2 years. Finally, dividends will continueto grow at 7% per year indefinitely. The companys cost of equity is 16%.

a. What is the price of the stock today?

b. What would the stock price be if the cost of equity increased to 20%?

c. What would the stock price be if the cost of equity decreased to 10