1.A stock is priced at $140. The year-end dividend is expected to be $5.00 and is expected to grow at a constant rate. If your required rate of return is 12%, what is the expected growth rate of the dividends?

2.Leduc Industries is a major engineering company in Winnipeg. It is expected to pay a dividend of $2.30 in one year's time. The company's earnings and dividends are expected to grow at 5% a year for the foreseeable future.

a.If the current price of Leduc's shares is $25 what is the required rate of return for investors?

b.If Leduc expects zero growth in the dividend and $2.30 is the future level of the dividend what should be the value of Leduc's shares?

3.You are examining the Andrews Company, which has just paid a dividend of $1.25. It has announced that it will grow its dividend by 12% each year for the next three years. It will then grow the dividend by 4% thereafter.How much would you be willing to pay for a share in Andrews today if your required rate of return is 10%?