[UofODucksFan323]

1What would be the price of a stock when next year’s dividend is expected to be $4.00, and then is expected to grow at a 25% rate for two years after that, and then grow at a constant rate of 5% thereafter? The stock’s required return is 13%

2What is the required return for a stock that has a 6% constant growth rate, a price of $25, an expected dividend of $2, and a P/E ratio of 10?

3What should be the current price of a share of stock if a $5 dividend was just paid, the stock has a required return of 20%, and a constant dividend growth rate of 6%?

4Which of the following statements is correct for an investor starting with $1,000 in common stocks over a 20-year investment horizon in which stocks averaged 11% in nominal terms and 4% in real terms? The portfolio value is now approximately:

$1,800 in real terms.
$3,679 in real terms.
$3,870 in nominal terms.
$8,062 in nominal terms.

[mcpeepants]

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