Hi,

Can you help me with this?

1. The stock of a company is selling at $15 per share. Suppose that this company just paid a dividend of %0.50 per share and the dividend is supposed to grow at a constant annual rate indefinitely. If the market requires an annual return of 12% for this stock, what is the growth rate of its dividend?

2. You won a lottery with a prize of $100,000. There are two payment options: A. Ten consecutive annual payments of $10,000 each with the first payment made in one year. B. One immediate lump-sum payment of $50,000. Suppose that these two options are indifferent to you. What is your required rate of return per annum?

3. Company paid their first annual dividend yesterday in the amount of $0.28 a share. The company plans to double each annual dividend payment, i.e., 100% growth rate, for the next three years. After that time they are planning on paying a constant $1.50 per share indefinitely. What is one share of stock worth today if the market rate of return on similar securities is 11.5%?

4. The gov has imposed a fine on a company. The fine calls for annual payments of $650,000; $900,000; 1.2 million respectively over the next three years. The 1^st payment is due one year from today. The gov plans to invest the funds until the final payment is collected and then donate the entire amount, including the investment earnings, to a national securities training center. The gov will earn 4.25% annual rate on the funds held. How much will the national securities training center receive three years from today?

Thank you