1. Company X just paid a dividend of $2 per share (this is at time 0). Dividends are ex- pected to grow at 5% per year forever. If investors require a rate of return of 10% on this stock (this is rE), what is the current price of one share? What is the price in 10 years?

2. ABC is a young company that plans to pay no dividends for the next 10 years, because it needs to reinvest its earnings to finance the companys growth. The company will pay its first dividend of $5 per share at time 11 and will increase the dividend by 5% every year thereafter. If the required rate of return on this company is 13%, what is its current price?

3. Firm Z expects to pay the following dividends over the next four years (years 1 through 4): $3, $15, $10, $2. Afterwards, the company will maintain a constant 5% growth rate in dividends forever. If the required return on this stock is 10%, what is its current price?