111. Springboro Tech is a young start-up company. No

dividends will be paid on the stock over the next 15 years, because the firm

needs to plow back its earnings to fuel growth. The company will pay a $12 per

share dividend in 16 years and will increase the dividend by 3 percent per year

thereafter. What is the current share price if the required return on this

stock is 8 percent?

A. $75.66

B. $88.19

C. $120.00

D. $164.59

E. $240.00

112. Galloway, Inc. has an odd dividend policy. The

company has just paid a dividend of $7 per share and has announced that it will

increase the dividend by $2 per share for each of the next 5 years, and then

never pay another dividend. How much are you willing to pay per share today to

buy this stock if you require a 15 percent return?

A. $27.08

B. $34.15

C. $41.72

D. $42.60

E. $43.33

113. Jen’s Fashions is growing quickly. Dividends are

expected to grow at a 22 percent rate for the next 3 years, with the growth

rate falling off to a constant 8 percent thereafter. The required return is 12

percent and the company just paid a $3.80 annual dividend. What is the current

share price?

A. $128.96

B. $131.11

C. $146.17

D. $148.87

E. $152.20

114. Hardwoods, Inc. is a mature manufacturing firm.

The company just paid a $10 dividend, but management expects to reduce the payout

by 9 percent each year, indefinitely. How much are you willing to pay today per

share to buy this stock if you require a 15 percent rate of return?

A. $34.79

B. $37.92

C. $38.27

D. $41.33

E. $42.09

115. Bechtel Machinery stock currently sells for $50

per share. The market requires a 15 percent return on the firm’s stock. The

company maintains a constant 8 percent growth rate in dividends. What was the

most recent annual dividend per share paid on this stock?

A. $3.00

B. $3.24

C. $3.50

D. $3.67

E. $3.91

116. Southern Utilities just issued some new preferred

stock. The issue will pay a $19 annual dividend in perpetuity beginning 9 years

from now. What is one share of this stock worth today if the market requires a

7 percent return on this investment?

A. $157.97

B. $164.16

C. $189.08

D. $241.41

E. $271.43

117. Big Falls Tours just paid a dividend of $1.55 per

share. The dividends are expected to grow at 30 percent for the next 8 years

and then level off to a 7 percent growth rate indefinitely. What is the price

of this stock today given a required return of 15 percent?

A. $67.54

B. $69.90

C. $72.47

D. $77.67

E. $78.19

118. Harvey County Choppers, Inc. is experiencing

rapid growth. The company expects dividends to grow at 25 percent per year for the

next 7 years before leveling off to 7 percent into perpetuity. The required

return on the stock is 12 percent. What is the current stock price if the

annual dividend share that was just paid was $1.05?

A. $60.15

B. $64.36

C. $67.37

D. $72.11

E. $75.19

119. Westover Winds just paid a dividend of $2.50 per

share. The company will increase its dividend by 8 percent next year and will

then reduce its dividend growth rate by 2 percentage points per year until it

reaches the industry average of 2 percent dividend growth, after which the

company will keep a constant growth rate forever. What is the price of this

stock today given a required return of 12 percent?

A. $28.42

B. $28.99

C. $31.83

D. $32.06

E. $32.47