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5. Albanian Technology Corp. (ATC) has been growing at the phenomenal rate of 20% per year due to the recent development of a new irrigation

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5. Albanian Technology Corp. (ATC) has been growing at the phenomenal rate of 20% per year due to the recent development of a new irrigation method. This growth rate is expected to last for two more years after which other companies will have developed similar systems, and ATC's growth rate will drop to 6% thereafter. The most recent annual dividend (Do), which was paid yesterday, was $1.75 per share. If the growth iin dividends matches the company's overall growth rate and if stockholders require a 12% return on ATC's stock, what is the current share price? A. $38.11 B. $39.38 C. $48.42 D. $33.817 6. You want to estimate the current price of a share of Duffie Corp. stock. You know that next year's dividend is expected to be $2.20 and the growth rate of dividends is 5%. You look in the Wall Street Journal and find that the riskfree interest rate is 4%. You also know from looking in Valueline that Duffie Corp. has a beta of 1.35. If the required return on the market is currently 12%, what is Duffie's current share price? A. $38.66 B. $29.39 C. $46.42 D. $22.4.5

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