What is the current value of one share of this stock

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Q1. Amgen plans on increasing its annual dividend by 15 percent a year for the next four years and then decreasing the growth rate to 2.5 percent per year. The company just paid its annual dividend in the amount of $2.00 per share. What is the current value of one share of this stock if the required rate of return is 17.4 percent?

Q2. ABC store just paid an annual dividend of $3.40 a share and is expected to increase that amount by 2.2 percent per year. If you are planning to buy 1,000 shares of this stock in two years, how much should you expect to pay per share if the market rate of return for this type of security is 14.8 percent at the time of your purchase?

Reference no: EM132910459

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