1. suppose the Paradise Beachwear Company has a policy of paying a $10 per share dividend every year. If this policy is to be continued indefinitely, what is the value of a share if the required return is 20%?

2. The last dividend, D0, was $2. The dividend is expected to grow steadily at 8%. The required return is 16%. Based on the dividend growth model, we can say that the current price is ?

3. We could calculate the price in five years by calculating the dividend in five years and then using the growth model again. Alternatively, we could recognise that the share price will increase by 8% per year and calculate the future price directly. We will do both. First, the dividend in five years will be ?

4. Kerikeri Campers Ltd just paid a dividend of $2.55 per share. The dividends are expected to grow at a constant rate of 3.9% per year, indefinitely. If investors require a return of 10.4% on Kerikeri shares, what is the current price? What will the price be in three years? In 15 years?