PART I
JJ Companies will pay an annual dividend of $4.20 a share on its common stock next year. Last week, the company paid a dividend of $4.00 a share. The company adheres to a constant rate of growth dividend policy. What will one share of this stock be worth 8 years from now if the applicable discount rate is 14 percent?
A. $68.95 B.
B. $81.44
C. $74.21
D. $71.16
E. $77.09
PART II
Wilton's Market just announced its next annual dividend will be $1.62 a share with future dividends increasing by 2.2 percent annually. How much will one share of this stock be worth 6 years from now if the required return is 12.5 percent?
A.$16.76
B.$17.92
C.$18.14
D.$18.32
E.$15.79
PART III
XanEx is a new firm that just paid an annual dividend of $1 a share. The firm plans to increase its dividend by 10 percent a year for the next 4 years and then decrease the growth rate to 2 percent annually. If the required rate of return is 18.25 percent, what is one share of this stock worth today?
A. $8.05
B. $8.19
C. $11.05
D. $11.19
E. $14.81