Exhibit 11.6 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Consider a firm that has just paid a dividend of $2. An analyst expects dividends to grow at a rate of 8% per year for the next five years. After that dividends are expected to grow at a normal rate of 5% per year. Assume that the appropriate discount rate is 7%. 9. Refer to Exhibit 11.6. The dividends for years 1, 2, and 3 are a. $2, $2.08, $2.16 b. $2, $2.05, $2.10 c. $2.16, $2.24, $2.32 d. $2.16, $2.33, $2.52 e. $2.07, $2.14, $2.21 10. Refer to Exhibit 11.6. The future price of the stock in year 5 is a. $113.40 b. $122.47 c. $132.27 d. $142.85 e. $154.35 11. Refer to Exhibit 11.6. The present value today of dividends for years 1 to 5 is a. $4.06 b. $10.28 c. $12.40 d. $14.52 e. $10.0 12. Refer to Exhibit 11.6. The price of the stock today (P0) is a. $136.29 b. $133.03 c. $120.33 d. $123.43 e. $126.60