1. Leprechaun's made two announcements concerning its common stock today. First, the company announced that its next annual dividend has been set at $3.20 a share. Secondly, the company announced that all future dividends will increase by 4% annually. What is the maximum amount you should pay to purchase a share of the companys stock if your goal is to earn a 8% rate of return?

$51.60

$62.46

$77.00

$80.00

$96.00

2. The General Metal Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 20% a year for the next four years and then increasing its dividend by 5% a year. The company just paid its annual dividend in the amount of $1.00 per share. What is the current value of one share if the required rate of return is 9.25%?

$35.63

$38.19

$41.05

$43.19

$45.8