$(1$ point$)$ Critical thinking & do your research discussion. Please answer the following

questions in a few sentences.

a$.$ Why does the value of a share of stock depend on dividends? A substantial percentage

of the companies listed on the NYSE and Nasdaq don't pay dividends, but investors

are nonetheless willing to buy shares in them. How is this possible?

b$.$ You are deciding between investing in long$-$term treasury bonds and corporate stocks.

Which one, on average, has the higher return? Which one, on average, has the higher

risk?

$($l point$)$ The Twice Co$.$ just paid a cash dividend of $$2$ per share. Investors require a $16$

percent return from investments such as this. If the dividend is expected to grow at a steady $8$

percent per year:

a$.$ what is the current value of the stock?

b$.$ What will the stock be worth in five years?

$(1$ point$)$ D&E Corp. is growing quickly. Dividends are expected to grow at a rate of $25$

percent for the next three years, with the growth rate falling off to a constant $4\mathrm{.}5$ percent,

thereafter. If the required return is $10\mathrm{.}5$ percent and the company just paid a dividend of

$$3\mathrm{.}15,$ what is the current share price?