1) A firm recently paid an annual dividend of $1.37 a share. Today, the company announced that future dividends will be increasing by 2.80% annually. If you require a return of 11.60%, how much are you willing to pay to purchase one share of this stock today?
a) $17.68
b) $16.67
c) $16.00
d) $18.23
2) Currently, a firm has a benchmark PE ratio of 18.7 and an EPS of $4.18 (annual). What is the firm's stock price per share?
a) $18.70
b) $4.47
c) $22
d) $78.17