Investors require a 15% rate of return on Levine Company's stock
A. what will be Levine's stock value if the previous dividend was D0=2 and if investors expect dividend to grow at a constant compound annual rate of 5% 6%
B. Using data from part a,what is the Gordon (constant growth) model value for Levine's stock if the required of return is 15% and the expected growth rate is 15% or 20%? Are these reasonable results? Explain.
C. Is if reasonable to expect that a constant growth would have g>k?