a. A new project has an initial cost of $235,000. The equipment will be depreciated on a straight-line basis to a zero book value over the five-year life of the project. The projected net income each year is $13,100, $17,700, $19,880, $15,000, and $11,600, respectively. What is the average accounting return?

b. You are considering purchasing stock in Canyon Echo. You feel the company will increase its dividend at 3.6 percent indefinitely. The company just paid a dividend of $3.71 and you feel that the required return on the stock is 12 percent. What is the price per share of the company's stock?

c

Santa Klaus Toys just paid a dividend of $1.60 per share. The required return is 8.9 percent and the perpetual dividend growth rate is 2.5 percent. What price should this stock sell for five years from today?

$28.99

$27.60

$29.72

$28.29

$25.00