You have decided you would like to own some shares of the Clean Coal Company but need a 12% rate of return to compensate for the perceived risk of such ownership. What is the maximum you are willing to spend per share to buy this stock if the company pays a constant $1.95 annual dividend per share?

Shares of Connaught Inc. common stock are currently selling for $40.00. The last dividend paid was $2.25 per share and the corporation rate of return is 14%. At what rate is the dividend growing?

BRIC recently paid a dividend of $2.25 on its common stock, and the company is expected to increase the dividend by 3% each year going forward. If the required rate of return for investors is 11%, what is your best estimate of the current price of BRICs common stock? (2 marks)