Question 1:

Sky High Co. just paid a dividend of $2.1 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year indefinitely. If investors require an 10.1 percent return on Sky High Co. stock, the current price is $ _________ . Round it to two decimal places, and do not include the $ sign, e.g., 23.56.

Question 2:

Sky High Co. just paid a dividend of $3.4 per share on its stock (D₀). The dividends are expected to grow at a constant rate of 5 percent per year indefinitely. If investors require an 14.8 percent return on Sky High Co. stock, the stock price in 4 years should be $ _________ . Round it to two decimal places, and do not include the $ sign, e.g., 23.56.

Question 3:

Pine Grove, Inc., is a thriving young company and it expects no dividends over the next 3 years because the company needs to reinvest its earnings to fund its various projects. The company will pay a $6.4 per share dividend in 4 years and will increase the dividend by 7 percent per year thereafter. If the required return on this stock is 10.9 percent, the current share price should be $_______. (Do not include the dollar sign ($). Round your answer to 2 decimal places. (e.g., 32.16))

Question 4:

Wonder Trees Inc. expects to pay the next dividend payment of $4.4 per share (D₁). The company is expected to maintain a 3 percent growth rate forever. If the company stock currently sells for $38 per share, the required return should be ______ percent. Express in percentage without the % sign, and round it to two decimal places, e.g., 13.45.

Question 5:

Rascal, Inc., has an issue of preferred stock outstanding that pays a $9.5 dividend every year in perpetuity. If this issue currently sellsfor $93.67 per share, the required return is ___________ percent. Express in percentage without the % sign, and round it to two decimal places, e.g., 13.45.