3. LSP co. has a preferred stock with an annual dividend of $8.5 per share. If the required return on this preferred stock is 7.5%, at what price should the stock sell? *

a) $106

b) $105

c) $103

d) $106.67

e) None of the above

5. LSP Co.s stock price is $58.88, and it recently paid a $2.00 dividend. This dividend is expected to grow by 52% for the next 3 years, then grow forever at a constant rate, g; and rs = 12%. At what constant rate is the stock expected to grow after Year 3? *

a) 9.5%

b) 6.25%

c) 15.75%

d) 33.33%

e) None of the above

6. What is the dividend yield of a stock of current price $35 and dividend paid $10? *

a) 3.5

b) 0.285

c) 28.5

d) 0.35

e) None of the above

7. How much are you willing to pay for one share of Saman bank stock if the company just paid a 1.5$ annual dividend, the dividends increase by 3% annually, and you require a 15% rate of return? *

a) $12.5

b) $10

c) $12.88

d) $13

e) None of the above