1.

The JacksonTimberlake Wardrobe Co. just paid a dividend of $1.50 per share on its stock. The dividends are expected to grow at a constant rate of 5 percent per year indefinitely. Investors require a return of 10 percent on the company's stock.

What is the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Current price

$

What will the stock price be in three years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Stock price

$

What will the stock price be in 10 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Stock price

$

2.

The next dividend payment by Halestorm, Inc., will be $2.00 per share. The dividends are anticipated to maintain a growth rate of 6 percent forever. If the stock currently sells for $40 per share, what is the required return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Required return

%

3.

The next dividend payment by Halestorm, Inc., will be $1.68 per share. The dividends are anticipated to maintain a growth rate of 6 percent forever. The stock currently sells for $32 per share.

What is the dividend yield? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Dividend yield

%

What is the expected capital gains yield? (Enter your answer as a percent.)

Capital gains yield

%

4.

Caan Corporation will pay a $3.02 per share dividend next year. The company pledges to increase its dividend by 5.5 percent per year indefinitely. If you require a return of 10 percent on your investment, how much will you pay for the companys stock today? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

Stock price

$

5.

Tell Me Why Co. is expected to maintain a constant 3.4 percent growth rate in its dividends indefinitely. If the company has a dividend yield of 5.2 percent, what is the required return on the companys stock? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Required return

%

6.

Estes Park Corp. pays a constant $8.45 dividend on its stock. The company will maintain this dividend for the next 15 years and will then cease paying dividends forever. If the required return on this stock is 13 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Current share price

$

7.

Moraine, Inc., has an issue of preferred stock outstanding that pays a $6.75 dividend every year in perpetuity. If this issue currently sells for $93 per share, what is the required return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Required return

%

8.

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth. The company will pay a $15 per share dividend 10 years from today and will increase the dividend by 5 percent per year thereafter. If the required return on this stock is 14.5 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Current share price

$

9.

Lohn Corporation is expected to pay the following dividends over the next four years: $18, $14, $13, and $7.50. Afterward, the company pledges to maintain a constant 4 percent growth rate in dividends forever. If the required return on the stock is 14 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Current share price

$

10.

Antiques R Us is a mature manufacturing firm. The company just paid a dividend of $11.90, but management expects to reduce the payout by 5 percent per year indefinitely. If you require a return of 12 percent on this stock, what will you pay for a share today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Current share price

$

11.

A7X Corp. just paid a dividend of $2.10 per share. The dividends are expected to grow at 24 percent for the next eight years and then level off to a growth rate of 6 percent indefinitely. If the required return is 13 percent, what is the price of the stock today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Stock price

$