Question 1: Carmichael just paid an annual dividend of $1.40. The company has increased their dividend by 2% a year for the past twenty years and expects to continue doing so. What will a share of this stock be worth five years from now if the required return is 12%? Please explain your answer and also provide examples
Question 2: Violet and company just announced that they will commence paying annual dividends next year. They plan to pay $1.00 a year for three years, $1.20 a year for the following two years, and then cease paying dividends. How much is one share of this stock worth to you today if you require a 10% rate of return?