. A stock is expected to pay a dividend of $0.50 at the end of the year (i.e., D1 = 0.50). Its dividend is expected to grow at a constant rate of 9 percent a year, and the stock has a required return of 12 percent. What is the expected price of the stock four years from today? *

a) $ 5.46

b) $ 10

c) $13.11

d) $12.25

e) None of the above

. A stock that currently trades for $40 per share is expected to pay a year-end dividend of $2 per share. The dividend is expected to grow at a constant rate over time. The stock has a beta of 1.2, the risk-free rate is 5 percent, and the market risk premium is 5 percent. What is the stocks expected price seven years from today? *

a) $ 56.26

b) $ 58.01

c) $ 83.05

d) $ 60.15

e) None of the above