1. Sam Adams is considering the purchase of Transam Corporation stock and plans to sell the stock one year from today. The projected annual dividend per share for the stock is $3.25 and Sam projects that he will be able to sell the stock at the end of the year for $45.75. If his required annual rate of return on this investment is 18%, what is the maximum amount that He would pay for the stock today? 2. Moshe Birnbaum would like to purchase the stock of Endicott Construction Corp and plans to hold the stock for three years. The projected annual dividends for the next three years are $2.78, $2.95, and $3.12, respectively. Moshe believes that at the end of the holding period, the stock will be selling for $45.68. If Moshe requires an annual rate of return of 22% on this investment, what would he be willing to pay for the stock today? 3. Vera Charles is considering the purchase of Catalina Corporation stock. The projected annual dividends per share for the next four years are $13, $9, $6, and $2.75 respectively. Vera projects that she will be able to sell the stock at the end of the fourth year for $50.22. If her required annual rate of return on this investment is 10.75%, what is the maximum amount that she would pay for the stock today? 4. Dom Dimaggio wishes to purchase the stock of Dollar Dry Dock Bank and hold the stock for four years at which time he plans to sell the stock. The most recent dividend paid on the stock last year was $3.08 per share. The bank plans to increase this dividend by 6% annually for each of the next two years, and increase the dividend again by 7% annually for the following two years. Dom projects that the selling price of the stock will be $68 per share. If he requires an annual rate of return of 17.55%, how much is he willing to pay for the stock today? 5. Earnest Eagleton would like to purchase the stock of Evergreen Elms Corporation. The company plans to pay a dividend of $4.18 for the first year and $4.85 for the second year and He projects that the stock will sell for $54.32 at the end of the second year. He uses the Capital Asset Pricing Model to calculate his required rate of return. The present annual Rate of Return on U.S. Treasury Bill is 4.76%, the Beta of the company is 1.23, and the expected annual Rate of Return on the stock market is 14.2%. What is the intrinsic value of this stock