QUESTION 1

1. "Company A has a current stock price of $70 and is expected to pay a $2 dividend in one year. The equity cost of capital is 20%. What price would its stock be expected to sell for immediately after it pays the dividend? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, enter 500 as an answer."

QUESTION 2

1. "Company B is expected to pay dividends of $1.5 every 6 months for the next 3 years. If the current price of Company B stock is $21, and Company B's equity cost of capital is 20%. What price would you expect the stock to sell for at the end of 3 years? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, enter 500 as an answer."

QUESTION 3

1. "Company C pays a dividend of $2 per share and is expected to pay this amount indefinitely. The equity cost of capital is 5%. What is the price of the stock? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, enter 500 as an answer."