#1 Stairway Corporation will pay a $3.60 per share dividend next year. The company pledges to increase its dividend by 4.5% per year indefinitely. If you require an 11 percent return on your investment, how much will you pay for the company's stock today?

#2 The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.60 per share on its stock. The dividends are expected to grow at a constant rate of 6% per year indefinitely. (a)If investors require a 12 percent return on its stock, what is the current price? (b)What will the price be in 15 years (at the same rate of return as above)?

#3 You observe a stock price of $18.75. You expect a dividend growth rate of 5% and the most recent dividend was $1.50. (a)What is the required return? (b)What is the capital gains yield?

#4 Ames Corporation stock currently sells for $50 per share. The market requires a 13 percent return on the firm's stock. If the company maintains a constant 5% growth rate in dividends, what was the most recent dividend per share paid?

#5 The Sisyphean Company's common stock is currently trading for $25.50 per share. The stock is expected to pay a $2.80 dividend at the end of the year and the Sisyphean Company's equity cost of capital (i.e., r) is 10%. What is the expected growth rate in the company's dividends?

#6 Matilda Industries pays a dividend of $2.10 per share and is expected to pay this amount indefinitely. If Matilda's equity cost of capital is 9%, which of the following would be closest to Matilda's stock price?