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1) LB Corp

Finance

1) LB Corp. has been growing at a rate of 14% per year in recent years. This same growth rate is expected to last indefinitely. The dividend just paid (D0) was $6.75 and the required rate of return is 14%. What is the value in year 2 of the dividend paid in that year? (what is D2, round to two decimals)

2) Shiny Industries producers of crab meat can issue perpetual preferred stock at a price of $30.99 per share. The stock would pay a constant annual dividend of $5.58 per share. What is the company's return on preferred stock  

3) Enchancia Incorporated has common stock that is expected to grow at a rate of 25% over the next year. After this first year, it will stabilize to a 2% long-term growth rate. If the dividend just paid was $1.93 and the required rate of return on the stock is 8%, what is the value of the stock today (to 2 decimals)? 

4) American Standard Corp. (AS) offers the following returns next year. What is the expected rate of return? (round to two decimals. Your answer should be in the form (##.## %) and should include a negative if appropriate

scenario probability AS returns

boom 30% 8%

normal economy 40% -11%

recession 30% 20%

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