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9. Wislow Brothers's common stock sells for $28.20 a share. The market rate of return on this stock is 15 percent. Its common stock pays
9. Wislow Brothers's common stock sells for $28.20 a share. The market rate of return on this stock is 15 percent. Its common stock pays an annual dividend that increases by 11.3 percent annually forever. What is the closest to the amount its dividend just paid? A. $0.94 B. $7.42 C. $6.67 D. $1.04 E. $2.87 10. XanEx is a new firm that will pay an annual dividend of $1 a share next year. The firm plans to increase its dividend by 20 percent a year from then on for the following two years. Then the annual dividend growth rate forever will be 5 percent lower than the constant required rate of return. If the required rate of return is 10.25 percent, what is the closest to what one share of this stock is worth today? A. $24.04 B. $25.59 C. $30.87 D. $34.21 E. $28.50
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