1- Weston Corporation just paid a dividend of $3.75 a share (i.e., D₀= $3.75). The dividend is expected to grow 9% a year for the next 3 years and then at 4% a year thereafter. What is the expected dividend per share for each of the next 5 years? Round your answers to two decimal places.

D₁= $ D₂= $ D₃= $ D₄= $ D₅= $

2- Constant growth valuation

Tresnan Brothers is expected to pay a $2 per share dividend at the end of the year (i.e., D₁= $2). The dividend is expected to grow at a constant rate of 6% a year. The required rate of return on the stock, r_s, is 14%. What is the stock's current value per share? Round your answer to two decimal places.

$ .......

3-Constant growth valuation

Holtzman Clothiers' stock currently sells for $35 a share. It just paid a dividend of $2.25 a share (i.e., D₀= $2.25). The dividend is expected to grow at a constant rate of 9% a year.

1. 4-Whatstockpriceisexpected1yearfromnow?Roundyouranswertotwodecimalplaces.
2. $......
3. Whatistherequiredrateofreturn?Roundyouranswerstotwodecimalplaces.Donotroundyourintermediatecalculations.
4. .......%

5-Scampini Technologies is expected to generate $50 million in free cash flow next year, and FCF is expected to grow at a constant rate of 7% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 14%. If Scampini has 35 million shares of stock outstanding, what is the stock's value per share? Round your answer to two decimal places.

Each share of common stock is worth $ ................., according to the corporate valuation model.

6- Farley Inc. has perpetual preferred stock outstanding that sells for $44.00 a share and pays a dividend of $5.00 at the end of each year. What is the required rate of return? Round your answer to two decimal places.

.......%

7- Preferred stock rate of return

What will be the nominal rate of return on a perpetual preferred stock with a $100 par value, a stated dividend of 9% of par, and a current market price of (a) $64.00, (b) $78.00, (c) $119.00, and (d) $149.00? Round your answers to two decimal places.

1. ............%
2. .........%
3. ...........%
4. .........%

8-

Preferred stock valuation

Earley Corporation issued perpetual preferred stock with a 10% annual dividend. The stock currently yields 10%, and its par value is $100.

1. Whatisthestock'svalue?Roundyouranswertotwodecimalplaces.
2. $
3. Supposeinterestratesriseandpullthepreferredstock'syieldupto12%.Whatisitsnewmarketvalue?Roundyouranswertotwodecimalplaces.
4. $

9-Preferred stock returns

Arondale Aeronautics has perpetual preferred stock outstanding with a par value of $100. The stock pays a quarterly dividend of $4, and its current price is $107.

1. Whatisitsnominalannualrateofreturn?Donotroundyourintermediatecalculations.Roundyouranswertotwodecimalplaces.
2. ......%
3. Whatisitseffectiveannualrateofreturn?Donotroundyourintermediatecalculations.Roundyouranswertotwodecimalplaces.
4. ........%

10- Valuation of a declining growth stock

Maxwell Mining Company's ore reserves are being depleted, so its sales are falling. Also, because its pit is getting deeper each year, its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 6% per year. If D₀= $3 and r_s= 10%, what is the value of Maxwell Mining's stock? Round your answer to two decimal places.

$ .....