Question 1: Answer each part to understand the concept. Use Excel as necessary and be sure to include cell references/formulas.

Part 1: The RLX Co. just paid a dividend of $3.20 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. If investors require a return of 10.5 percent on the companys stock, what is the current price? What will be the price in 3 years and in 15 years?

Part 2: RLX Co. will pay a dividend of $3.04 per share next year. The company pledges to increase its dividend by 3.75 percent indefinitely. If you require a return of 11 percent on your investment, how much will you pay for the companys stock today?

Part 3: RLX Co. has an issue of preferred stock outstanding that pays a $3.80 dividend every year in perpetuity. If this issue currently sells for $93 per share, what is the required return?

Part 4: RLX Co. is growing quickly. Dividends are expected to grow at a rate of 30 percent for the next three years, with the growth rate falling off to a constant 4 percent thereafter. If the required return is 10 percent, and the company just paid a dividend of $2.65, what is the current share price?