Problems: 2 (c), 3 (c,f); 4 (b,f); 5 (a,c); 8 (a,d); 11 (d).

Dietterich Electronics wants its shareholders to earn a 15% return on their investment in the company. At what price would the stock need to be priced today if Dietterich Electronics had a a. $0.25 constant annual dividend forever? b. $1.00 constant annual dividend forever? c. $1.75 constant annual dividend forever? d. $2.50 constant annual dividend forever? Singing Fish Fine Foods has a current annual cash dividend policy of $2.25. The price of the stock is set to yield a 12% return. What is the price of this stock if the dividend will be paid a. for 10 years? b. for 15 years? c. for 40 years? d. for 60 years? e for 100 years? Pfender Guitars has a current annual cash dividend policy of $4.00. The price of the stock is set to yield an 8% return. What is the price of this stock if the dividend will paid a. for 10 years and then the company repurchases he stock for $25.00? b. for 15 years and then the company repurchases the stock for $25.00? c. for 40 years and then the company repurchases the stock for $25.00? d. for 50 years and then the company repurchases the stock for $25.00? e. for 100 years and then the company repurchases the stock for $25.00? f. forever with no repurchase of the stock? King Waterbeds has an annual cash dividend policy that raises the dividend each year by 4%. Last year's dividend was $0.40 per share, What is the stock's price if a. an investor wants a 5% return? b. an investor wants an 8% return? c. an investor wants a 10% return? d. an investor wants a 13% return? e. an investor wants a 20% return? Sia Dance Studios has an annual cash dividend policy that raises the dividend each year by 2%, year's dividend was $300 per share. The company will be in business for forty years with no liquidating dividend. What is the price of this stock if a. an investor wants a 9% return? b. an investor wants a 11% return? c. an investor wants a 13% return? an investor wants a 15% return? e. an investor wants a 17% return? Fenway Athletic Club plans to offer its members preferred stock with a par value of $100 and a 6% annual dividend rate. What price should these members be willing to pay for the returns they want? a. Theo wants a 10% return. b. Jonathan wants a 12% return. Josh wants a 15% return. a Terry wants an 18% return