1. PartyAnimal pays a constant annual dividend of $3.50 a share and currently sells for $54 a share. What is the rate of return?
2. Find the dividend for each of the following years if dividends grow at a constant 4% per year and the most recent dividend paid was $2.60.
A. D3
B. D7
C. D12
3. A company paid a dividend of $1.45 per share at the end of the year. They plan to increase the dividend by 25% year 1, 17% year 2, and 5% a year indefinitely. What are you willing to pay for this stock today if required return is 19%?
4. ChickenPea stock is currently selling for $17 a share. Their most recent dividend was $1.75/share and management just declared a dividend of $1.95. What is the annual growth rate?