1. XYZ Company stock is selling for $40 a share and has a current dividend yield (D1/P) of 4 percent. What is the amount of the last dividend paid (D0) if the dividend growth rate is 3 percent?

2. ABC company paid a dividend of $1.20 per share last year (D0) and has a policy of increasing its dividend by 2.5 percent annually. How much are you willing to pay to purchase one share of this stock considering that you require a 14 percent rate of return?

3. XYZ company is expected to pay a dividend of $1.20 per share next year (D1) and has a policy of increasing its dividend by 2.5 percent annually. How much are you willing to pay to purchase one share of this stock considering that you require a 14 percent rate of return?