1. You buy a stock from which you expect to receive an annual dividend of $2.50 for each of the three years that you plan on holding it. At the end of year three, you expect o be able to sell the stock for $185. What is the most that you should be willing to pay today for a share of this company if you want to earn a return of atleast 9%?

A) $68.75 B) $149.18 C) $192. 50 D) $199.33

2. Atlantic Corporation just paid an annual dividend of $1.50 per share on its common stock. Dividends are expected to grow at an annual rate of 4% hereafter. If investors require a rate of return of 8% on Atlantic stock, what is the most they should be willing to pay for a share of this stock today?

A) $18.75 B) $37.50 C) $39.00 D) $49.31

3. Pacific Corporation just paid an annual dividends $1.50 per share on its common stock. dividends are expected to grow at an annual rate of rate of 4% hereafter. if the risk- free rate is 2.5%, the MRP is 7% and Pacific's stock is only half as risky as the market average, what is the most you should be wiling to pay for a share of this stock TODAY?

A) $54.26 B) $63.17 C)$75.00 D) $78.00