1. Arcs and Triangles paid an annual dividend of $1.47 a share yesterday. The company is planning on paying $2.55, $2.63, and $3.65 a share over the next three years, respectively. After that, the dividend will be constant at $4.80 per share per year. What is the market price of this stock if the market rate of return is 10 percent?
A. $43.30 B. $39.98 C. $48.07 D. $57.40
2. A company paid a dividend of $2.70 per share yesterday. The dividend is expected to remain constant for four years. At year four, after receiving the dividend, the stock can be sold for $55 a share. If the appropriate discount rate is 10 percent, what is the price of te stock today?
A. $48 B. $42 C. $46 D. $44