Question: 1. Company B whose stock is trading at Php110 per share requires an 8% minimum rate of return and will pay a Php3 dividend per

1. Company B whose stock is trading at Php110 per share requires an 8% minimum rate of return and will pay a Php3 dividend per share next year, which is expected to increase by 5% annually. What is the value of the stock? Is it worth buying? Why? 2. Company C is trading at $25 per share and requires a 10% discount rate. The company will pay $2 per share indefinitely. What is the value of the stock? Is it worth buying? Why?

5. Suppose Integrity Corporationnhas the following expected dividends for the next 4 years:

Year Expected Dividend 1 $2.00 2 $3.50 3 $4.60 4 $5.00 The dividend will grow by 6% after the fourth year. The required rate of return is 12%. What is the value of the stock today? If the stock is selling at $50, is it worth buying? 3. SMPH has the following dividends. What is the value of the stock if the ror is 13%. If the stock is selling at Php29.95, is it worth buying? Why? 5 points.

YEAR DIVIDENDS 2016 0.23 2017 0.26 2018 0.30 2019 0.35

2020 0.185

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