1. A company juts paid a dividend of $1.75 per share, and the stock currently sells for $49. If the discount rate is 13%, what is the dividend growth rate?
2. Bill’s Bakery expects earnings per share of $2.87 next year. Current book value is $4.63 per share. The appropriate discount rate for Bill’s Bakery is 11%. What is the price per share for Bill’s Bakery if earnings grow at 3% forever?
3. LL Corp. is expected to pay the following dividends over the next three years: $20, $15, $5. After that, the company expects to be able to maintain a constant 4% growth in dividends. If investors require 15% return on this stock, what is the current share price?