USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

Davenport Corporation's last dividend was $2.70 and the directors expect to maintain the historic 3 percent annual rate of growth. You plan to purchase the stock today because you feel that the growth rate will increase to 5 percent for the next three years and the stock will then reach $25 per share.

32. Refer to Exhibit 11.4. How much should you be willing to pay for the stock if you require a 17 percent return?

a.	$16.97
b.	$22.16
c.	$21.32
d.	$32.63
e.	$23.63

33. Refer to Exhibit 11.4. How much should you be willing to pay for the stock if you feel that the 5 percent growth rate can be maintained indefinitely and you require a 17 percent return?

a.	$22.16
b.	$19.28
c.	$21.32
d.	$23.63
e.	$25.46