1. Bruin Corporation is expected to pay the following dividends over the next 3 years: $3.81, $10 and $3.60. Afterwards, the company pledges to maintain a constant 5 percent growth rate in dividends forever. If the required return on the stock is 12 percent, what is the current share price?

a. 71.37

b. 103.40

c. 52.37

d. 49.60

e. 44.22

2. Bruin Co. is growing quickly. Dividends are expected to grow at a rate of 25 percent for the next three years, with the growth rate falling of to a constant 5 percent thereafter. If the required return is 15 percent and the company just paid a $2.88 dividend, what is the share price at the end of supernormal growth (at Year 3)?

a. 37.50

b. 39.38

c. 56.25

d. 30.24

e. 59.06