Reference no: EM132012717

1. A stock is expected to pay a dividend of $2.6 one year from now, and the same amount every year thereafter. The stock's required return (indefinitely) is expected to be 10.8%. The stock's predicted price exactly 5 years from now, P5, should be $_______________.

2. A stock is expected to pay a dividend of $1.1 one year from now, $1.7 two years from now, and $2.3 three years from now. The growth rate in dividends after that point is expected to be 8% annually. The required return on the stock is 13%. The estimated price per share of the stock six years from now should be $_________.

3. A stock's dividend in 1 year is expected to be $2.3. The dividend is expected to remain the same indefinitely. The stock's required return is 10%. The estimated value of the stock today is $________.

4. A stock will pay no dividends for the next 3 years. Four years from now, the stock is expected to pay its first dividend in the amount of $2.4. It is expected to pay a dividend of $2.7 exactly five years from now. The dividend is expected to grow at a rate of 7% per year forever after that point. The required return on the stock is 14%. The stock's estimated price per share exactly TWO years from now, P2 , should be $______.

Do not round any intermediate work, but round your final answer to 2 decimal places (ex: $12.34567 should be entered as 12.35).