1.How much are you willing to pay for one share of stock if the company just paid an annual dividend of $1.03, the dividends increase by 3 percent annually, and you require a rate of return of 15 percent?

$10.40

$8.84

$6.87

$9.49

$8.58

2.The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 20 percent next year and then decreasing the growth rate to a constant 5 percent per year. The company just paid its annual dividend in the amount of $1 per share. What is the current value of a share if the required rate of return is 14 percent?

$13.24

$13.19

$13.28

$13.33

$13.42

3.Wilbert's Clothing Stores just paid a $1.20 annual dividend and increases its dividend by 2.5 percent annually. You would like to purchase 100 shares of stock in this firm but realize that you will not have the funds to do so for another three years. If you desire a 10 percent rate of return, how much should you expect to pay for 100 shares when you can afford to buy this stock? Ignore trading costs.

$1,810

$1,766

$1,640

$1,681

$1,723

4.A company plans to pay an annual dividend of $.30 a share for two years commencing two years from today. After that time, a constant $1 a share annual dividend is planned indefinitely. Given a required return of 14 percent, what is the current value of this stock?

$5.58

$5.25

$5.39

$5.46

$4.82