10. DS will pay an annual dividend of $1.46 a share next year with future dividends increasing by 4.2 percent annually. What is the market rate of return if the stock is currently selling for $42.10 a share?

a. 6.55 percent

b. 7.13 percent

c. 7.46 percent

d. 7.67 percent

e. 8.29 percent

11. GL Health Care common stock offers an expected total return of 9.2 percent. The last annual dividend was $2.10 a share. Dividends increase at a constant 2.6 percent per year. What is the dividend yield?

a. 3.75 percent

b. 4.20 percent

c. 4.55 percent

d. 5.25 percent

e. 6.60 percent

12. Company As common stock returned a nifty 23.5 percent rate of return last year. The dividend amount was $0.25 a share which equated to a dividend yield of 0.95 percent. What was the rate of price appreciation for the year?

a. 22.55 percent

b. 23.38 percent

c. 23.60 percent

d. 23.87 percent

e. 23.52 percent

13. Company As last dividend (D0) was $1.55. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firms required return (rs) is 12.0%. What is the best estimate of the current stock price?

a. $37.05

b. $38.16

c. $39.30

d. $40.48

e. $41.70

14. Company A just paid a dividend of D0 = $1.32. Analysts expect the companys dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stocks current market value?

a. $41.59

b. $42.65

c. $43.75

d. $44.87

e. $45.99

15. Company As last dividend (D0) was $1.75. Its dividend growth rate is expected to be constant at 25% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price?

a. $41.58

b. $42.64

c. $43.71

d. $44.80

e. $45.92