1. A share of Lash Inc.'s common stock just paid a dividend of $2.10. If the expected long-run growth rate for this stock is 5%, and if investors' required rate of return is 8.5%, what is the stock price?
a. $63.00
b. $65.70
c. $62.10
d. $64.80
e. $63.90
2. A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 5.5%. What is the stock's current price?
a. $15.00
b. $13.90
c. $13.35
d. $13.35
e. $15.55