1) DeWitt, Corp just paid a dividend of $1 and the dividend will be growing at a constant rate of 20% for 2 years, and after that it will be growing at 7%. What is the intrinsic value of DeWitt's stock if investors require a rate of return of 9.5%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

What is the Intrinsic Value?

2) ABC, Inc., just paid a dividend of $1.40, and the company expect to grow its dividend at a constant rate of 5%. What is ABC's required rate of return if its today's value based on the dividend discount model is $36.16, ? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Rate of Return?

3) The market requires a return of 10% from XYZ, Inc. The firm plowback 50% of its earnings, and its return on equity and earnings per share are expected to be 15% and $7, respectively.

a. What will be XYZ's growth rate? (Input your answer as a nearest whole percent.)

b. Calculate XYZ's P/E ratio? (Do not round intermediate calculations.)

4) Bravissimi, Inc. is going to pay a dividend of $4, and the dividends are expected to grow at a constant rate of 5% every year. The beta of Bravissimi's stock will be constant at 0.62. The T-bill rate is currently estimated to be 5%, and the return of S&P500 index is expected to be 12%.

a. What rate of return Bravissimi's investors require? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Market Capitalization Rate?

b. Calculate the current value of Bravissimi's stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Intrinsic Value?

5) Investors require a 10% return from Sommers, Inc. The company's return on equity is 16%, and expects to have an earnings per share of $6 next year. The company ususally plowback 60% of its earnings for future growth.

What is the current value of Sommers' stock? (Do not round intermediate calculations.)

Price?

6) Axel is expected to remain an annual dividend of $3.80. What is Axel's stock value if the T-bill rate is 8% and Axel stock's risk premium is 2%?

Stock Value?

7) ABC, Inc. is expected to pay an annual dividend per share of $3.00, and investors require a rate of return on S&P500 index is 15%, with the T-bill rate at 5%. What should be the current share price of ABC's stock if ABC's beta is 1.2, with a growth rate of 5%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Share Price?

8) a. The common stock of Russel, Corp. is currently selling at $50 and investors require a rate of return of 18%. Russel is expected to pay a dividend of $1. At what rate the market would expect Russel's dividends to growth? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Growth Rate?

b. What will be the price of Russel's common shares if analysts revised its dividend growth rate down to 2%?(Round your answer to 2 decimal places.)

Price?

c. After that dividend growth revision, Russel's P/E ratio would be

a) The P/E ratio will increase.

b) The P/E ratio will decrease.

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