Question: Question 1 (2 points) XYZ, Inc. is expected to pay a dividend of $1 which is expected to grow at a constant annual rate of

Question 1 (2 points)

XYZ, Inc. is expected to pay a dividend of $1 which is expected to grow at a constant annual rate of 3%. What is the value of this stock (to the nearest dollar) if the required rate of return is 10%?

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Question 2 (2 points)

XYZ, Inc. is expected to pay a dividend of $3 which is expected to grow at a constant annual rate of 5%. What is the expected rate of return on this stock if it currently sells at $87 per share? Show your answer in percent to one decimal.

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Question 2 options:

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