1. The next dividend payment by Boundary Bay Inc. will be $0.89 per share. The dividends are anticipated to maintain a growth rate of 5 percent forever. If the stock currently sells for $38 per share, what is the required return?
a. 5.00%
b. 7.34%
c. 9.97%
d. 2.34%
2. Far Side Corporation is expected to pay the following dividends over the next four years: $10, $8, $5, and $2. Afterward, the company pledges to maintain a constant 5 percent growth rate in dividends forever. If the required return on the stock is 11 percent, what is the current share price?
a. $51.25
b. $41.35
c. $42.71
d. $44.84
e. $43.53
Please do rate me and mention doubts in the comments section. I can only answer 1 question at a time so I am solving question 1.
1. The next dividend payment by Boundary Bay Inc. will be $0.89 per share. The dividends...
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