PART I

New Tours last annual dividend was $2 a share. The company plans to lower the dividend by $.30 each year for the next 3 years. In Year 5, it will pay a final liquidating dividend of $17 a share. If the required return is 22 percent, what is the current per share value of this stock?

A. $9.23

B. $13.08

C. $10.61

D. $14.13

E. $8.86

PART II

Midtown Enterprises paid its first annual dividend yesterday in the amount of $.26 a share. The company plans to double each annual dividend payment for the next 3 years. After that, it will pay a constant $2.40 per share dividend indefinitely. What is one share of this stock worth today if the market rate of return on similar securities is 14.5 percent?

A. $10.79

B. $11.40

C. $14.08

D. $12.93

E. $13.66