# solution

The Barry Blue jeans Denim Co. will pay a dividend of \$100 one year from now. Subsequent dividends will rise by 6% for the next 4 years after that, and then remain constant. Given an annual discount rate of 8%, find the present value of this companyâ€™s stock. Select one:

a. \$1324

b. \$1120

c. \$1287

d. \$1482

e. \$1520

The Parsons Cashew Company has issued stock which pays an annual dividend of \$160, with the next dividend paid one year from today. If market interest rates are 14% annually, find the current price for a share of this companyâ€™s stock

Select one:

a. \$1143

b. \$944

c. \$1598.

d. \$1037.

e. \$2330

Today you purchase a stock for \$160 which will pay constant annual dividends, beginning one year from today. If the annual discount rate is 8%, find the amount for each dividend.

Select one:

a. \$14.30

b. \$17.40

c. \$12.80

d. \$15.20

e.\$11.20

Suppose you own a stock which just paid a dividend of \$40 today. Dividends will grow by 5% per year, with the next dividend paid one year from now. What will be the dividend you receive seven years from now?

Select one:

a. \$56.

b. \$53

c. \$68

d. \$64

e.\$49

You own a stock which will pay a dividend of \$60 one year from now. Subsequent dividends will increase by 1% per year. If the current annual discount rate is 12%, find the present value of this stock.

Select one:

a. \$640

b. \$590

c. \$470

d. \$820

e.\$545

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