You have found the following quote for ABC Enterprises, Inc., in the financial pages of today's

newspaper.

a$.$ What was the closing price for this stock that appeared in yesterday's paper? $(30$ points$)$

b$.$ If the company currently has $20$ million shares of stock outstanding, what was net income for the

most recent four quarters? $(20$ points$)$

Problem $2$

The board of a company decides to pay the following dividends over the next four years: $$10,$$$8,$$$7,$ and

$$3.$ Afterward, the company pledges to maintain a constant $5\%$ growth rate in dividends forever. As the

financial manager of the company, what will be the current price per share of stock if the required return

on the stock is $11\%?(30$ points$)$

Problem $3$

A mature manufacturing firm just paid a dividend of $$10,$ but management expects to reduce the payout by

$5\%$ per year, indefinitely. If you require a return of $12\%$ on this stock, what will you pay for a share of

stock today? $(20$ Points$)$