QUESTION 1

1. The next dividend for the Karen & Co. is $2 per share. Investors require a 12% return on its stock. Karens dividends are expected to grow at a rate of 7% per year. What is the value of Karens stock today?

QUESTION 2

1. The Sorg Co. has just paid a dividend of $4 per share. Investors require a 15% return on its stock. The dividends are expected to grow at a rate of 5% per year? What is the expected value of the stock in 10 years?

   Round to 2 decimal places.

QUESTION 3

1. Harrison Co.s stock currently sells for $20.00 a share. It just paid a dividend of $1.00 per share. The dividend is expected to grow at a constant rate of 6% per year. What is the required rate of return?

   Round to 1 decimal place.

QUESTION 4

1. The 8 percent semi- annual coupon bonds of Heinz Inc. are selling for $887. The bonds have a face value of $1,000 and mature in 6 years. What is the yield to maturity?

   Round to 2 decimal places.