1. Suppose a firm is expected to increase dividends by 5% in one year and by 10% for another three years. After that, dividends will increase at a rate of 1% per year indefinitely. If the last dividend paid was $1 and the required return is 8%, what is the price of the stock?

2. Pulling out the dividend history of Company B, you find out that Company B has been increasing its dividend at 0.2% for the past 6 years. You predict this growth rate (0.2%) will stay at this level for another 5 years. After that, the dividend will be constant forever. Suppose the dividend just paid is $0.6. The required return for this stock is 6%. What is the fair price of Company Bs stock? What is the fair price of Company Bs stock in ten years?

3. Company C has been paying dividend at $0.5 per share for a decade. They plan to keep this dividend for another five years and then start to grow their dividend at 2% forever. Suppose the required rate of return is 12%. What is the fair price of Company Cs stock today? What is the fair price of Company Bs stock in three years? In five years?