1) The Johnston Company will pay an annual dividend of $3 next year. The company has increased its dividend by 2.85 percent a year for the past...

1)

The Johnston Company will pay an annual dividend of $3 next year. The company has increased its dividend by 2.85 percent a year for the past twenty years and expects to continue doing so. What will a share of this stock be worth 10 years from now if the required return is 11 percent?

2)

Boots Roofing just paid its annual dividend of $2 a share (this is DIV0). The firm recently announced that all future dividends will be increased by 2.75 percent annually. What is one share of this stock worth to you today if you require a 7 percent rate of return?

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