5 in the third and fourth years and beginning with the fifth year should attain

5 in the third and fourth years and beginning with

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5% in the third and fourth years and,  beginning with the  fifth year, should attain a 10% growth rate which it  will sustain thereafter.  The last dividend paid was $0.50 per share.  ACE has a cost of capital of 12%. What  should be the present price per share of ACE common stock?    [$20.84] 20
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 83. The ACE Auto Parts Company has just recently been organized.  It is expected to experience no growth for the  next 2 years as it identifies its market and acquires its inventory.  However, ACE will grow at an annual rate of  5% in the third and fourth years and,  beginning with the fifth year, should attain a 10% growth rate which it  will sustain thereafter.  The last dividend paid was $0.50 per share.  ACE has a cost of capital of 12%. What  should be the price per share of ACE stock at the beginning of the third year (P2)?    [$25.08]  84. AT&E, Inc., a large conglomerate, has decided to acquire another firm.  Analysts are forecasting that there will be  a period (2 years) of extraordinary growth (20%) followed by another 2 years of unusual growth (10%), and that  finally the previous growth pattern of 6% annually will resume.  If the last dividend was $1 per share and the  required return is 8%, what should the market price be today?    [$72.76]  85. The BB Company has fallen on hard times.  Its management expects to pay no dividends for the next 2 years.  However, the dividend for Year 3 (D3) will be $1.00 per share, and it is expected to grow at a rate of 3% in Year  4, 6% in Year 5, and 10% in Year 6 and thereafter. If the required return for BB Co. is 20%, what is the current  equilibrium price of the stock?    [$6.34]  86. The Teetertotter Company is expecting both earnings and dividends to grow by 5% in Year 1, 0% in Year 2, 5% in  Year 3, and 10% in Year 4 and thereafter.  The required return on Teetertotter is 15%, and the equilibrium price  (P0) is $49.87.  What is the expected value of the next dividend (D1)?    [$2.85]  87. Negative Limited is expected to grow for four years at a rate of 50 percent.  After four years, the product fad is  expected to decline, and Negative will grow at a negative growth rate of 5 percent.  Negative currently pays a  dividend of $1.00 per share and stockholders have a required rate of return of 18 percent.  What should be the  market value for a share of Negative Limited stock?    [$18.34]  88. GWK Corp. stock is currently paying a dividend of $2.00 per share (D0 = $2) and is in equilibrium.  The company  has a growth rate of 5% and beta equal to 1.5.  The required rate of return on the market is 15%, and the risk-free 
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