A. Company ABC paid $1.50 as an annual dividend per share last year. The company is expected to increase their annual dividends by 8% each year. How much should you pay to purchase one share of this stock if you require a 12% rate of return on this investment?

B. Company XYZ just paid an annual dividend of $0.80. Their dividends are expected to increase by 6% annually. The Company stock is selling for $9.54 a share. What is the required rate of return on this stock implied by the dividend-growth model?

C. Karadowa is a manufacturer of boat parts and has been in business only a few years. Its board of directors decided to start paying a dividend to help boost the attractiveness of its stock. The dividend paid $0.60 per share last year. After that dividends will increase by 6 percent per year. The company has a beta of 1.8. The market rate of return is 12% and the T-bill rate is 5%. What will be the expected share price?