1. Our firm has just issued preferred stock called 10/10 preferred. The stock will pay a $10 dividend per year, but the first dividend will not be paid for 10 years. If you require a 9% return on this stock, how much should you pay today (approximately)?

$111.

$99.

$56.

$51.

$47.

2. McGonigal's Meats, Inc. currently pays no dividends. The firm plans to begin paying dividends in 6 years. The first dividend will be $1.50 (D6) and dividends will grow at 6% per year thereafter. Given a required return of 10%, what would you pay for the stock today (approximately)?

$21.17

$23.28

$17.10

$37.50

$15.00

3. The XYZ Corporation just paid a cash dividend of $3.00 today (D0). It is estimated that this firm's dividends will grow at 30% per year for the next two years. After this two year period the growth rate will drop to 6%for the foreseeable future. If you are considering buying XYZ's common stock, and, because of risks involved, require a return of at least 12%, what is the most you should be willing to pay for this stock (approximately)?

$53

$90

$65

$82

$79