Question 1 [2] TR Incorporated is expected to pay a dividend (D1) of R3.00 next year with the growth in dividends expected to remain constant at 5%. The required rate of return is 10%. Calculate TR's share price today.

Question 2 [8] LG Corp. anticipates a non-constant growth pattern for dividends. Dividends are expected to be $1.30 next year followed by a 15% growth rate until the end of year five. At this time, dividends will grow at a 5% rate for the foreseeable future. Use a discount rate of 12% throughout your analysis to value the share.

Question 3 [5] PSG expects to have earnings per share of $5.25 in 2005 and $5.65 in 2006 The average price-earnings ratio for the storage industry is 10X (times). PSG has traditionally had a P/E ratio 12% higher than the industry and in 2005 it is expected to be 15% higher than the industry. Calculate the expected price of Pacific's stock price in 2005 and 2006 based on expectations of EPS and P/E ratios