The common stock of Pendant Publishing currently sells for $22, and is expected to pay a dividend next year of $1.54 per share.

5. The common stock of Pendant Publishing currently sells for $22, and is expected to pay a dividend next year of $1.54 per share. If future dividends are expected to grow at a constant rate, and investors require a 13.0% return, what is the expected future growth rate of the dividend?

6. What is the current share price of Kruger Industrial Smoothing if investors require an 9% return and the company currently pays $2.85 in dividends each year – a dividend amount that is expected to remain flat for the foreseeable future?

7. The stock of Top of the Muffin currently pays a dividend of $4.20. The dividend is expected to grow by 25% per year for the next three years. In year 4 it will increase by an additional $4.00, and after that point it will grow at 3% per year for the foreseeable future. If you require a 8.5% return for investing in this stock, what is a share of the stock worth to you today? 8. The J Peterman Corporation has had a rough year, and has currently suspended dividend payments. Two years from now they anticipate paying dividends once again, when $1.50 per share will be paid. The following year they will pay $2.50, and the year after that $3.75. Beyond that point, dividends should grow 5% a year for the foreseeable future. If you require a 10.6% return for investing in this stock, what is a share of the stock worth to you today?

8. The J Peterman Corporation has had a rough year, and has currently suspended dividend payments. Two years from now they anticipate paying dividends once again, when $1.50 per share will be paid. The following year they will pay $2.50, and the year after that $3.75. Beyond that point, dividends should grow 5% a year for the foreseeable future. If you require a 10.6% return for investing in this stock, what is a share of the stock worth to you today?

9. Rochelle, Rochelle Partners stock currently trades at $23.27. It will pay dividends for the next four years of $0.75 each year. In year 5 the dividend will grow by 20%, and it will grow by an additional 20% per year compounded for the three years after that (years 6-8) as well. Starting in year 9, the dividend growth rate will settle into a steady rate of growth which you forecast to remain constant indefinitely from that point forward. Assuming your discount rate is 9%, what is the minimum rate of growth in the dividend you need to have from year 9 onward in order to justify the current price of the shares?

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