Newco Inc. is a startup firm that is still in a period of rapid development. The company plans on retaining all of its earnings and pay no dividend for the next 5 years. Six years from now, the company projects paying an annual dividend of $1.00 share and then increasing that amount by 2% anually thereafter. What is the value of their stock if the discount rate is 10%> (Ch8) a. $3.40 b. $4.02 c. $5.19 d. $7.76 e. $8.22 4. Phantron Inc. just paid $1.40 to their shareholds as the annual dividend Simultaneously, the company announced that future dividends will be increasing 3% percent. If you require a 8 percent rate of return, how much are you willing pay to purchase one share of the stock? (Ch 8) a. $28.84 b. $36.40 c. $40.00 d. $49.00 e. $46.66