Question 1
Catfish, Inc. just paid $1.86 to its shareholders as the annual dividend. Simultaneously, the company announced that future dividends will be increasing by 3.76 percent. If you require a rate of return of 9.89 percent, how much are you willing to pay today to purchase one share of Catfish stock?
Question 2
Character Co. offers a common stock that pays an annual dividend of $3.43 a share. The company has promised to maintain a constant dividend. How much are you willing to pay for one share of this stock if you want to earn a 7.59 percent return on your equity investments?