1. 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 percent per year indefinitely. If investors require a 12 percent return on the Jackson-Timberlake Wardrobe Co. stock, what is the current price? What will the price be in three years? In 15 years?

2. The next dividend payment by Top Knot, Inc., will be $2.50 per share. The dividends are anticipated to maintain a 5 percent growth rate forever. If the stock currently sells for $48.00 per share, what is the required return?

3. For the company in the previous problem, what is the dividend yield? What is the expected capital gains yield?

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

5. Listen Close Co. is expected to maintain a constant 6.5 percent growth rate in its dividends indefinitely. If the company has a dividend yield of 3.6 percent, what is the required return on the company's stock?

6. Suppose you know that a company's stock currently sells for $60 per share and the required return on the stock is 12 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?