1.

2.

Assume Evco, Inc. has a current stock price of $45.95 and will pay a $2.00 dividend in one year, its equity cost of capital is 10%. What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price? We can expect Evco stock to sell for S (Round to the nearest cent.) Assume Coleco pays an annual dividend of $1.55 and has a share price of $37.43. It announces that its annual dividend will increase to $1.77. If its dividend yield stays the same, what should be its new share price? The new price will beS(Round to the nearest cent.)