1. You expect a stock to sell for $100 after two years and pay $20 in dividends each year. What would you pay for it today if the interest rate is 4% ?
2. Compute the price of a share of stock that pays a dividend of $2 per year, assuming that you will sell it for $30 after two years and you require 12% return.
3. A stock paid $4 dividends last year, the dividends grow by 10% annually.
4. What would you be willing to pay for it today? assuming that you will hold it forever, Interest rate is 12 %