1. AssumeEvco, Inc. has a current stock price of $ 46.06 and will pay a $ 2.25 dividend in oneyear; its equity cost of capital is 10 %. What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its currentprice?
2. AFW Industries has 175 million shares outstanding and expects earnings at the end of this year of $ 712 million. AFW plans to pay out 65 % of its earnings intotal, paying 30 % as a dividend and using 35 % to repurchase shares. IfAFW's earnings are expected to grow by 8.5 % per year and these payout rates remainconstant, determineAFW's share price assuming an equity cost of capital of 11.6 %.
3. Zoom Enterprises expects that one year from now it will pay a total dividend of $ 5.1

million and repurchase $ 5.1 million worth of shares. It plans to spend $ 10.2 million on dividends and repurchases every year after thatforever, although it may not always be an even split between dividends and repurchases. IfZoom's equity cost of capital is 12.9 % and it has 4.6 million sharesoutstanding, what is its share pricetoday?