1). Gilmore, Inc., just paid a dividend of $2.40 per share on its stock. The dividends are expected to grow at a constant rate of 6.25 percent per year, indefinitely. Assume investors require a return of 12 percent on this stock. What is the current price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Current price = 44.35
What will the price be in four years and in sixteen years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
2). The next dividend payment by Dizzle, Inc., will be $2.80 per share. The dividends are anticipated to maintain a growth rate of 5.25 percent, forever. If the stock currently sells for $49.20 per share, what is the required return?
3). Take Time Corporation will pay a dividend of $4.75 per share next year. The company pledges to increase its dividend by 7.5 percent per year, indefinitely.
If you require a return of 9 percent on your investment, how much will you pay for the company's stock today?