81. KL Airlines paid an annual dividend of $1.42 a
share last month. The company is planning on paying $1.50, $1.75, and $1.80 a
share over the next 3 years, respectively. After that, the dividend will be
constant at $2 per share per year. What is the market price of this stock if
the market rate of return is 10.5 percent?
A. $15.98
B. $16.07
C. $18.24
D. $21.16
E. $24.10
82. Renew It, Inc., is preparing to pay its first
dividend. It is going to pay $0.45, $0.60, and $1 a share over the next three
years, respectively. After that, the company has stated that the annual
dividend will be $1.25 per share indefinitely. What is this stock worth to you
per share if you demand a 10.8 percent rate of return on stocks of this
type?
A. $6.67
B. $8.21
C. $10.14
D. $11.47
E. $12.03
83. Diets For You announced today that it will begin
paying annual dividends next year. The first dividend will be $0.12 a share.
The following dividends will be $0.15, $0.20, $0.50, and $0.60 a share annually
for the following 4 years, respectively. After that, dividends are projected to
increase by 4 percent per year. How much are you willing to pay to buy one
share of this stock today if your desired rate of return is 8.5 percent?
A. $9.67
B. $9.94
C. $10.38
D. $10.50
E. $10.86
84. Crystal Glass recently paid $3.60 as an annual
dividend. Future dividends are projected at $3.80, $4.10, and $4.25 over the
next 3 years, respectively. Beginning 4 years from now, the dividend is
expected to increase by 3.25 percent annually. What is one share of this stock
worth to you if you require a 12.5 percent rate of return on similar
investments?
A. $42.92
B. $43.40
C. $45.12
D. $45.88
E. $46.50
85. Langley Enterprises pays a constant dividend of
$0.60 a share. The company announced today that it will continue to pay the
dividend for another 2 years after which time all dividends will cease. What is
one share of this stock worth today if the required rate of return is 16.5
percent?
A. $0.92
B. $0.96
C. $1.04
D. $1.09
E. $1.20
86. Yesteryear Productions pays no dividend at the
present time. The company plans to start paying an annual dividend in the
amount of $0.40 a share for two years commencing four years from today. After
that time, the company plans on paying a constant $0.75 a share annual dividend
indefinitely. How much are you willing to pay to buy a share of this stock
today if your required return is 11.6 percent?
A. $3.78
B. $4.22
C. $4.37
D. $4.71
E. $4.98
87. Sweatshirts Unlimited is downsizing. The company
paid a $2.80 annual dividend last year. The company has announced plans to
lower the dividend by 25 percent each year. Once the dividend amount becomes
zero, the company will cease all dividends and go out of business. You have a
required rate of return of 15.5 percent on this particular stock given the
company’s situation. What are your shares in this firm worth today on a per
share basis?
A. $5.19
B. $6.91
C. $8.68
D. $19.29
E. $22.11
88. Dexter Metals, paid its first annual dividend
yesterday in the amount of $0.18 a share. The company plans to double each
annual dividend payment for the next 3 years. After that time, it plans to pay
$1.25 a share for 2 years than then pay a constant dividend of $1.60 per share
indefinitely. What is one share of this stock worth today if the market rate of
return on similar securities is 10.24 percent?
A. $12.32
B. $12.77
C. $13.20
D. $14.26
E. $14.79
89. Marshall Arts Studios just paid an annual dividend
of $1.36 a share. The firm plans to pay annual dividends of $1.40, $1.46, and
$1.58 over the next 3 years, respectively. After that time, the dividends will
be held constant at $1.60 per share. What is this stock worth today at a 9
percent discount rate?
A. $14.08
B. $14.30
C. $16.67
D. $16.79
E. $17.46
90. Home Care Providers is paying an annual dividend
of $1.10 every other year. The last dividend was paid two years ago. The firm
will continue this policy until 3 more dividend payments have been paid. One
year after the last dividend normal payment, the company plans to pay a final
liquidating dividend of $40 per share. What is the current market value of this
stock if the required return is 17 percent?
A. $18.92
B. $20.74
C. $23.16
D. $24.14
E. $24.53
