2. A stock currently pays $2.00 in dividends. They are expected to grow at 10% for the next 4 years and 7% thereafter. The investors required rate of return is 10%. What is the value of the stock. 3. A stock pays a current dividend of $5.00 that grows at 5% per year. The required rate of return on the stock is 10%. Who would pay more for it, an investor with a two year investment horizon or an investor with a five year investment horizon. 4. Company X earned $10 a share last year and paid a dividend of $6 a share. Next year, you expect company X to earn $11 and continue its payout ratio. Assume you expect to sell the stock for $132 a year from now. If you require 12% on this stock, how much would you be willing to pay for it? 5. You have been reading about a computer company which currently retains 90% of its earnings ($5 a share this year). It earns an ROE of almost 30%. Assuming a required rate of return of 14%, how much would you pay for this company on the basis of the earnings multiplier model and an earnings estimate for next year? What would you pay for the company if its retention rate was 60% and its ROE was 19%? 6. Given the following company information calculate ROE and EPS. Sales = 100,000,000 Total assets = 33,333,333 ROA = .00672 Book value per share = 22.222 Debt Ratio = .33333