1. Super Carpeting Inc. just paid a dividend (D0) of $1.68, and its divident is expected to grow at a constant rate of (g) of 3.50% per year. If the required return (r?s) ?on Super's stock is 8.75%, what is the intrinsic value of Super's shares?

a. $19.20 per share

b. $33.12 per share

c. $36.02 per share

d $32.00 per share

2. Which of the following statements is true about the constant growth model?

a. The constant growth model can be used if a stock's expected constant growth rate is less than is required return.

b. The constant growth model can be used if stock's expected constant growth rate is more than its required return.

Use the constant growth model to calculate the appropraite values to complete the following statements about Super Carpeting Inc.

1. If Super Markets stock is in equilibrium, the current expected divident yield on the stock will be a. 3.62% b. 5.07% c. 5.25% d. 5.43% per share.

2. Super's expected stock price one year from today will be a. $34.28 b. $20.57 c. $32.00 d. $33.12 per share

3. If Super's Stock is in equilibrium, the current expected capital gains yield on Super's Stock will be A. 4.20% b. 0.18% c. 9.29% d. 3.50%