1) Panera Company has just announced that its next annual dividend has been set at $1.76 a share. Secondly, the company announced that all future dividends will increase by 6.1% annually. What is the maximum amount you should pay to purchase a share of Westpoint's stock if your goal is to earn a 14.5% rate of return?

		$19.67
		$20.38
		$20.95
		$21.49
		$21.87

2) The common stock of Livingston Furnitures sells for $28.80 a share. The stock is expected to pay $1.64 per share next year when the annual dividend is distributed. Livingston Furnitures has established a pattern of increasing its dividends by 5% annually and expects to continue doing so. What is the market rate of return on this stock?

		11.12%
		10.69%
		9.87%
		9.41%
		8.90%

3)McGill, Inc. will pay a quarterly dividend per share of $.0.62 at the end of each of the next 10 quarters. Thereafter, the dividend will grow at a quarterly rate of 1.8 percent, forever. The appropriate rate of return on the stock is 12.4 percent, compounded quarterly. What is the current stock price? (Hint: rate of return is quoted in nominal term, i.e., per year)

		$45.34
		$29.86
		$33.51
		$37.28
		$41.04

4)Solar Tech is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 16% a year for the next five years and then decreasing the growth rate to 5.5% per year. The company just paid its annual dividend in the amount of $1.25 per share. What is the current value of one share if the required rate of return is 13.5%?

		$25.06
		$27.49
		$23.64
		$29.20
		$21.51

5)Autodesk Corporation earned $9.4 million for the fiscal year ending yesterday. The company also paid out 30 percent of its earnings as dividends yesterday. The firm will continue to pay out 30 percent of its earnings as annual, end-of-year dividends. The remaining 70 percent of earnings is retained by the company for use in projects. The company has 1.6 million shares of common stock outstanding. The current stock price is $38.8. The historical return on equity (ROE) of 12 percent is expected to continue in the future. What is the required rate of return on the stock? (Hint: use the retention ratio and ROE to estimate the growth rate)

		16.05%
		15.28%
		14.01%
		13.32%
		12.86%