Security analysts expect AGG to pay a $1.20 dividend and its stock to be sold for $15

next year. The required rate of return on AGGs stock is 8%.

10)

What is the maximum price you would pay for AGGs stock today?

___

$15

_____(Make sure you can do this

problem to get these answers)

11)

FCE just paid a dividend of $1.00. The analysts consensus is that FCE's dividend will

be increased by 10% during the next three years. Calculate FCE's dividends for the next

three years.

__$1.1___, _$1.21_____, _$1.331____

____

12)

FCEs stock is selling for the same intrinsic value that you calculated for AGGs, and the

analysts consensus is that FCE's stocks will be selling for $17.53 three years from now.

Estimate the required rate of return for the FCE's stock

?

A)12.51%

B)12.98%

C) 14.0%

D)19.0%