1) Zeniba Inc.s stock is currently selling for $23.56 per share. The company just paid a dividend = $2.00 per share (i.e., D₀ = $2.00), and investors expect the dividend to grow at a constant rate out into the future. Investors require a minimum annual return on their investments in Zeniba stock = 15%. What is the growth rate of dividends per share expected by investors?

2) The Yubaba Company has so far not paid a dividend on its stock. Investors believe that the Company wont pay a dividend next year, but that it will pay dividends starting two years from now. The dividend then is expected to be $0.20 per share. Three years from now the dividend is expected to be $0.50 per share, and four years from now its expected to be $0.75 per share. Thereafter the dividend is expected to grow at a constant rate = 4% per year. Investors require a minimum annual rate of return on Yubaba stock = 13%.

a) What is your estimate of Yubabas stock price four years from now?

b) What is your estimate of Yubabas stock price today?