1. Using the Dividend Growth Model, the formula for determining the value of a constant growth stock is:
   1. Price today (P) = Dividend in one year/(required rate of return on the stock expected growth rate in dividends)
   2. Price today (P) = Coupon/(required rate of return on the stock expected growth rate in dividends)
   3. Price today(P) = Par/(required rate of return on the stock expected growth rate in dividends)

1. Using the formula for determining the value of a constant growth stock, and D=$1.00, r = 10% and g = 5%, the price of the stock today is:
   1. $15.00
   2. $20.00
   3. $25.00
2. If the dividend today is $2.50 and is expected to grow at a constant rate of 4%, the dividend 3 years from now will be:
   1. $2.60
   2. $2.70
   3. $2.81

1. What is the value of a share of stock today if the dividend a year from now is $2.03, the required rate of return on the stock is 10.5% and the dividend growth rate is 4%?
   1. $31.20
   2. $35.10
   3. $56.19
2. What is the value of a share of stock today if the dividend a year from now is $5.00, the required rate of return on the stock is 12% and the dividend growth rate is 2%?
   1. $41.00
   2. $51.00
   3. $61.00
3. What is the value of a share of stock with non-constant growth in dividends, and dividend present values of $7.21, $10.15 and $12.43 for the next three years?
   1. $59.38
   2. $29.79
   3. $12.43
4. If the present value of the dividends in a non-constant growth period is $24.80 and the present value of the dividends in the constant growth period thereafter is $26.22, the price of the stock today is:
   1. $24.80
   2. $26.22
   3. $51.02
5. The Price/Earnings multiple (or ratio) is used to determine the price of a share of stock when:
   1. The stock is not paying a dividend
   2. The stock is priced below the book value of the stock
   3. The fundamental price of the stock is higher than the market value of the stock
6. The P/E ratio for a corporation with a stock price of $100 and earnings per share of $20 is:
   1. 20
   2. 10
   3. 5

1. A corporation with a P/E ratio of 21 that is expected to earn $4.04 per share, would have an expected stock price today of:
   1. $75.25
   2. $84.84
   3. $100.00