PART I

The Extreme Reaches Corp.s last annual dividend was $1.98 per share. The company is planning on paying $2, $2, $2.50, and $3 a share over the next 4 years, respectively. After that, the dividend will be a constant $2.50 per share per year. What is the current price of this stock if the rate of return is 13 percent?

A.19.17 B.

$21.96

C.$16.57

D.$18.70

E.$23.71

PART II

Mario's is going to pay $1, $2.65, and $4 a share over the next 3 years, respectively. After that, the company plans to pay annual dividends of $1.65 per share indefinitely. If your required return is 14 percent, how much are you willing to pay for one share today?

A. $12.74

B. $14.02

C. $12.90

D. $13.57

E. $13.67

PART III

Dille Inc. pays no dividend at the present time. In Years 2 and 3, the firm will pay annual dividends of $4 a share. After that, it will pay a constant $2 a share dividend indefinitely. What is this stock worth at a required return of 17 percent?

A.$12.29

B.$11.81

C.$12.77

D.$12.50

E.$11.07