Find the present value of a stock which will pay a dividend of $60 later today, with each subsequent annual dividend at a constant $50, given an annual interest rate of 15%.
Select one:
a. $355
b. $319
c. $393
d. $410
e. $429
Suppose you are gifted a stock which would sell for $750 today, and pays its next dividend of $45 one year from today. If the current annual discount rate is 9%, what is the growth rate of these dividends?
Select one:
a. 5% a
b. 7%
c. 4%
d. 3%
e. 2%
Find the present value of a stock which will issue a $35 dividend one year from today, which will grow by 10% per year for the following 3 years and then fall to 4% growth per year for each year after that. Assume an effective annual interest rate of 12%.
Select one:
a. $507
b. $566
c. $720
d. $442
e. $401
The Kepler Hospitality Group is in financial trouble: They will issue a $90 dividend later today, but they expect that dividends will fall by 4% per year for each year after. Find the present value of a share of this company’s stock, given an annual discount rate of 12%.
Select one:
a. $670
b. $630
c. $790
d. $540
e. $710
