1.Find the expected return on the stock, if the current price is $60, the expected dividend is $2 per share to be paid in 1 year, and the expected share price in one year is $65.

11.67%

14.17%

16.67%

19.17%

15.17%

2.Consider a stock that is expected to pay a $1 per share dividend in 1 year. The share price in 1 year (right after the dividend is paid) is expected to be $40. The required return on the stock is 12%. Find the share price today.

$36.61

$34.41

$38.85

$33.58

$31.22

3.Consider a stock with a current price of $25, an expected dividend of $2 per share in 1 year, and a required return of 12%. What should be the expected share price in one year?"

$25.50

$25.75

$26

$26.25

$25

4.Find the share price today if you expect a $1.50 per share annual dividend that will remain constant forever. The required return on the stock is 10%.

$15

$25

$25

$30

$35

5.Find the expected return on a $20 stock if you expect a $1.50 per share annual dividend that will grow at 1% per year forever.

8.5%

9.5%

10.5%

11.5%

12.5%

6.Find the expected growth rate of dividends if the stock sells for $30, the next annual dividend is expected to be $1.50 per share, and the required return is 12%."

5%

6%

7%

8%

4%

7.Find the share price today if you expect a $1.50 per share annual dividend next year, which will grow at 2% per year forever. The required return on the stock is 10%."

$16.67

$18.75

$21.43

$25

$15