1.

Assume Coleco pays an annual dividend of $1.41 and has a share price of $35.25. It announces that its annual dividend will increase to $1.61. If its dividend yield is to stay the same, what should its new share price be?

2.

CX Enterprises has the following expected dividends: $1.07 in one year, $1.15 in two years, and $1.29 in three years. After that, its dividends are expected to grow at 4.5% per year forever (so that year four's dividend will be 4.5% more than $1.29 and so on). If CX's equity cost of capital is 11.6%, what is the current price of its stock?