1. What is the expected dividend to be paid in 3 years if yesterday's dividend was $6.00, dividends are expected to grow at a constant 6% annual rate, and the firm has a 10% expected return?
A. $6.75
B. $7.15
C. $7.80
D. $9.37
2. What dividend yield would be reported in the financial press for a stock that currently pays a $1 dividend per quarter and the most recent stock price was $40?
A. 2.5%
B. 4.0%
C. 10.0%
D. 15.0%
3. If the dividend yield for year 1 is expected to be 5% based on the current price of $25, what will the year 4 dividend be if dividends grow at a constant 6%?
A. $1.33
B. $1.49
C. $1.58
D. $1.67
4. What rate of return is expected from a stock that sells for $30 per share, pays $1.50 annually in dividends, and is expected to sell for $33 per share in one year?
A. 5.00%
B. 10.00%
C. 14.09%
D. 15.00%
5. A stock paying $5 in annual dividends sells now for $80 and has an expected return of 14%. What might investors expect to pay for the stock 1 year from now?
A. $82.20
B. $86.20
C. $87.20
D. $91.20