2. GCC just paid a dividend today of $1.50 (this is D0). It expects to continue to grow at 7% per year indefinitely. What is the price of the stock if you have a 10% required return? (4 points)
3. Flores, Inc is going to pay dividends of $8, $9, $10, and $3.00 over the next 4 years. Thereafter, the company will raise dividends by 6% per year indefinitely. How much is the stock worth today if your required rate of return is 8%? (6 points)
4. Tua Inc. is going to either sold off some of its fixed assets and is contemplating paying an extra dividend or doing a share repurchase. They raised $7,095 from the sale of the assets. Current EPS is $2.70 per share and the stock sells for $59 per share. There are 4,300 shares outstanding. This problem requires math and an explanation. Parts a and b are worth 10 points each.
   1. Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth.
   2. What will be the effect on the companys EPS and PE ratio under the two scenarios?
5. Keiser, Inc is determining whether to do a dividend or a repurchase. Use the table below to answer the following questions. Each question is worth 5 points each.
   1. What will the stock sell for tomorrow?
   2. What will the Balance Sheet look like tomorrow after the dividend is paid?
   3. What effect will the repurchase have on the equity of the company?
   4. How many shares will be outstanding after the repurchase?
   5. What will the price per share be after the repurchase?

Cash	$120,000	Liabilities	$100,000
Fixed Assets	$476,600	Equity	$496,600
Total Asset	$596,600	Total L/E	$596,600
Dividend Declared	$1.15
Ex-Dividend Date	Tomorrow
Shares Outstanding	19,000
Repurchase	$21,850