2) Mercury Companys current stock price is$36.00, its last dividend was $2.40, and its required rate of return is 12%. If dividends are expected to grow at a constant rate, g, in the future and if rs is expected to remain at 12%, what is Mercurys expected stock price 8 years from now? *

a) $53.19

b) $54.19

c) $55.19

d) $56.19

None of the above

3) Snyder Computers Inc. is experiencing rapid growth. Earnings and dividends are expected to grow at a rate of 15% during the next 2 years, at 13% the following year, and at a constant rate of 6% during Year 4 and thereafter. Its last dividend was $1.15, and its required rate of return is 12%. What is the price of the stock in Year 1? *

a) $25.23

b) $30.36

c) $26.93

d) $32.08

None of the above