1- An investor purchases the common stock of a wellknown company, Toma Inc., for $25 per share. The expected dividend for the next year is $3 per share, and the investor is confident that the stock can be sold one year from now for $30. What is the implied rate of return?

2- Johnson and Johnson Pharmaceuticals (J&J) is expected to earn $2 per share next year. J&J has a payout ratio of 40 percent. Earnings and dividends have been growing at a constant rate of 10 percent per year, but analysts are estimating that the growth rate will be 7 percent a year for the indefinite future. Investors require a 15 percent return on J&J. What is its estimated price?

3- You expect a stocks dividend to increase by a compound factor of 1.7835 over eight years (compound growth). The current price is $45 . The expected dividend is $2.00. What is the expected return on this stock?