14. A stock has a steady 5% growth rate in dividends. The required rate of return for stock of this risk class is 15%. The stock is expected to pay a $1 dividend this coming year. The expected value of the stock at the end of the fourth year is: *

A. $12.16

B. $14.21

C. $16.32

D. $18.20

E. None of the above

15. Beachbalts, Inc., expects abnormally high earnings for the next three years due to the forecast of unusually hot summers. After the 3-year period, their growth will level off to its normal rate of 6%. Dividends and earnings are expected to grow at 20% for years 1 and 2 and 15% in year 3. The last dividend paid was $1.00. If an investor requires a 10% return on Beachballs, the price she is willing to pay for the stock is closest to: *

A. $26.00

B. $36.50

C. $50.00

D. $80.00

E. None of the above

16. Jora Corp. is expected to pay a $2 per share dividend at the end of the year (that is, D1 = $2). The dividend is expected to grow at a constant rate of 8% a year. The required rate of return on the stock, rs, is 10%. What is the stocks current value per share? *

A. $10

B. $100

C. $200

D. $50

E. None of the above

17. A company has perpetual preferred stock outstanding that pays a dividend of $10 at the end of each year and the required rate of return is 14%. What is the price of the preferred stock? *

A. 71.42%

B. $71.42

C. 17.24%

D. $17.24

E. None of the above