1. PPP's made two announcements concerning its common stock today. First, the company announced that its next annual dividend has been set at $2.16 a share. Secondly, the company announced that all future dividends will increase by 4% annually. What is the maximum amount you should pay to purchase a share ofPPP's stock if your goal is to earn a 10% rate of return?

   $21.60

   $22.46

   $27.44

   $34.62

   $36.00

1. How much are you willing to pay for one share of stock if the company just paid an $.80 annual dividend, the dividends increase by 4% annually and you require an 8% rate of return?

   $19.23

   $20.00

   $20.40

   $20.80

   $21.63

1. TheLMNCo. justreportedits FCFof $4Mand is establishing a policy whereby theFCFwill increase by 3.0% annually thereafter.Assume that the company has been financed by all equity, and the number of total equity shares outstanding is 10M.How much will one share be worthtodayif the required rate of return is 13%?

   $3.61

   $4.12

   $5.14

   $6.95

   $7.79