A stock just paid a dividend of $4.25 and is expected to maintain a constant dividend growth rate of 4.4 percent indefinitely. If the current stock price is $72, what is the required return on the stock?

9.79%

10.56%

9.01%

10.30%

9.86%

The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 20 percent a year for the next 4 years and then decreasing the growth rate to 4 percent per year. The company just paid its annual dividend in the amount of $2.70 per share. What is the current value of one share of this stock if the required rate of return is 8.20 percent?

$117.93

$141.33

$138.63

$101.15

$115.23