1. The next dividend payment by Savitz, Inc., will be $4.45 per share. The dividends are anticipated to maintain a growth rate of 5 percent forever.

If the stock currently sells for $44 per share, what is the required return?

Multiple Choice

• 14.36%

• 5.00%

• 15.11%

• 10.11%

• 14.81%

2. Hudson Corporation will pay a dividend of $3.30 per share next year. The company pledges to increase its dividend by 3.30 percent per year indefinitely.

If you require a return of 5.40 percent on your investment, how much will you pay for the company's stock today?

Multiple Choice

• $150.86

• $157.14

• $163.43

• $152.12

• $36.72