Stocks A has a price of $50, an expected constant growth of 12%, and the expected return for the stock is 15%. If the dividend discount model holds:

 A's expected dividend is $0.90

 A's expected dividend is $1.05

 A's expected dividend is $1.20

 A's expected dividend is $1.35

 A's expected dividend is $1.50

A stock pays dividends of $1.00 at t = 1. (D₁ is provided here, not D₀)   It is growing at 20% between t =1 and t = 2, after which the growth rate drops to 13%, and will continue at that rate into the future. If the discount rate for this stock is 15%, what should be the value of the stock at t = 0? Hint: Make a diagram indicating ranges of the growth rates and the resulting dividends.

Weir Inc. has a target capital structure of 30% debt, 25% preferred, and 45% common equity.  The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of retained earnings is 9.6%, and the tax rate is 40%.  The WACC for Weir is: