A) Miller Brothers Hardware paid an annual dividend of $1.15 per share last month. Today, the company announced that future dividends will be increasing by 2.82 percent annually. If you require a 12 percent rate of return, how much are you willing to pay to purchase one share of this stock today?

1. $12.23
2. $12.55
3. $12.67
4. $12.72
5. $12.88

b) The common stock of Textile Mills pays an annual dividend of $1.65 a share. The company has promised to maintain a constant dividend even though economic times are tough. How much are you willing to pay for one share of this stock if you want to earn an 11.33 percent annual return?

1. $13.75
2. $14.01
3. $14.56
4. $14.79
5. $15.23

C)The common stock of Auto Deliveries sells for $28.16 a share. The stock is expected to pay $1.35 per share next year when the annual dividend is distributed. The firm has established a pattern of increasing its dividends by 2.626 percent annually and expects to continue doing so. What is the market rate of return on this stock? 7.42 percent

1) 7.79 percent

2) 19.67 percent

3) 20.14 percent

4) 20.86 percent