Marcel Co. is growing quickly. Dividends are expected to grow at a 22 percent rate for the next 3 years, with the growth rate falling off to a constant 3 percent thereafter.

Required:

If the required return is 10 percent and the company just paid a $1.70 dividend. what is the current share price? (Do not round your intermediate calculations.)

$37.32

$38.10

$41.23

$39.61

$40.42

Antiques R Us is a mature manufacturing firm. The company just paid a $7 dividend, but management expects to reduce the payout by 5 percent per year indefinitely.

Required :

If you require an 12 percent return on this stock, what will you pay for a share today?

$38.73

$41.18

$39.51

$95.00

$39.12