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Friedman Steel Company will pay a dividend of $7.10 per share in the next 12 months...

Friedman Steel Company will pay a dividend of $7.10 per share in the next 12 months (D1). The required rate of return (Ke) is 18 percent and the constant growth rate is 8 percent. (Each question is independent of the others. Round the final answers to 2 decimal places.)   

a. Compute P0.

Price of common share         $

b. Assume Ke, the required rate of return, goes up to 21 percent, what will be the new value of P0?   

New price of common share           $

c. Assume the growth rate (g) goes up to 11 percent, what will be the new value of P0?   

New price of common share           $

d. Assume D1 is $7.90, what will be the new value of P0?

  

New price of common share           $

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