Question $3$

Bluewater Inc increases its dividend $2\mathrm{.}5$ percent per year every year. The stock currently sells for $$19$ per share and the appropriate discount rate is $12$ percent. You plan on holding the stock indefinitely. What do you expect the value of your dividend check to be four years from today?

$2\mathrm{.}50$

$1\mathrm{.}94$

$2\mathrm{.}25$

$2\mathrm{.}08$

Question $4$

Forest Products Inc has a ROE of $13$ percent. Its earnings last year were $$3\mathrm{.}25$ and it paid a dividend of $$1\mathrm{.}25.$ What is the company's payout ratio?

$87\%$

$13\%$

$61\mathrm{.}5\%$

$38\mathrm{.}5\%$

Question $5$

Forest Products Inc has a ROE of $13$ percent. Its earnings last year were $$3\mathrm{.}25$ and it paid a dividend of $$1\mathrm{.}25.$ What is the company's retention ratio?

$38\mathrm{.}5$

$87$

$61\mathrm{.}5$