Your next assignment is to assume that your firm has a risk-free rate of 6 percent and a market risk premium also of 6 percent. Your firms beta is 1.5 and the last time your firm paid a dividend was $2.00 per share:

a. What would your firms stock value be if the dividend was expected to grow at a constant:

*-5 percent

*0 percent

*5 percent

*10 percent

b. What would your firms stock value be if the growth rate is 10 percent, but the firms beta falls to:

* 1.0

* 0.5