1.

Cashway Lumber recently paid a $2.20 dividend. Dividends are expected to grow at 3 percent per year for the foreseeable future. The required rate of return for their stock is 8 percent.

Round your answers to two decimals.

What will their dividend be at the end of this year? Answer

What will their dividend be three years from now? Answer

What will their dividend be seven years from now? Answer

What is the current price of their stock? Answer

What will the price of their stock be five years from now? Answer

2. You intend to purchase Brins Furniture stock for $28.50. Its dividends have grown by 7% and are expected to continue to grow at this rate. The stock recently paid dividends of $0.75 per share.

What is the expected return on Brins stock?