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(Estimated time: 5 minutes) CafeSi Inc. (publicly traded firm) plans to pay a dividend of $10 next year. CafeSi follows a dividend policy that raises
(Estimated time: 5 minutes) CafeSi Inc. (publicly traded firm) plans to pay a dividend of $10 next year. CafeSi follows a dividend policy that raises dividends annually at a rate of 2% (and expects this rate to go forever). The required rate of return is 9%. You plan to compute the price at the end of year 2 using the constant growth dividend model (Gordon model). What is the amount of dividend to use if you want to compute the stock price at the end of year 2? For your answer, round to 2 decimals and do not use the \$.Do not use commas to separate thousands. (Estimated time allowance: 9 minutes) ETP Corp. paid an annual dividend last year of $10 per share. The company follows a policy to raise dividends each year by 2%. The company will be in business for 14 years and not have a liquidating dividend ( " "there is no future selling price at the end of 14 years). The required rate of return for this investment is 12%. What is the price of this stock today? For your answer, round to 2 decimals and do not use the \$.Do not use commas to separate thousands
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