1. Thirsty Cactus Corp. just paid a dividend of $1.55 per share. The dividends are expected to grow at 30 percent for the next 7 years and then level off to a 8 percent growth rate indefinitely. Required : If the required return is 15 percent, what is the price of the stock today?
2. Metroplex Corporation will pay a $2.80 per share dividend next year. The company pledges to increase its dividend by 5.70 percent per year indefinitely. Required: If you require an 9.90 percent return on your investment, how much will you pay for the company's stock today?