# BUSINESS

30. **Value of a Preferred Stock** If a preferred stock from Pfizer Inc. (PFE) pays $3.00 in annual dividends, and the required return on the preferred stock is 7 percent, what’s the value of the stock?

A. $0.21

B. $0.43

C. $21.00

D. $42.86

31. **Value of a Preferred Stock** If a preferred stock from Ecology and Environment, Inc. (EEI) pays $2.50 in annual dividends, and the required return on the preferred stock is 5.8 percent, what’s the value of the stock?

A. $0.15

B. $0.43

C. $14.50

D. $43.10

32. **P/E Ratio and Stock Price** International Business Machines (IBM) has earnings per share of $6.85 and a P/E ratio of 15.19. What is the stock price?

A. $0.45

B. $2.22

C. $45.09

D. $104.05

33. **P/E Ratio and Stock Price** Pfizer, Inc. (PFE) has earnings per share of $2.09 and a P/E ratio of 11.02. What is the stock price?

A. $0.19

B. $5.27

C. $18.97

D. $23.03

34. **P/E Ratio and Stock Price** Ralph Lauren (RL) has earnings per share of $3.85 and a P/E ratio of 17.37. What is the stock price?

A. $0.22

B. $4.51

C. $22.16

D. $66.87

35. **Value of Dividends and Future Price** A firm is expected to pay a dividend of $2.00 next year and $2.14 the following year. Financial analysts believe the stock will be at their target price of $75.00 in two years. Compute the value of this stock with a required return of 10 percent.

A. $65.40

B. $66.67

C. $65.57

D. $79.14

36. **Value of Dividends and Future Price** A firm is expected to pay a dividend of $3.00 next year and $3.21 the following year. Financial analysts believe the stock will be at their target price of $80.00 in two years. Compute the value of this stock with a required return of 13 percent.

A. $50.00

B. $67.52

C. $67.82

D. $86.21

37. **Dividend Growth** Annual dividends of Wal-Mart Stores (WMT) grew from $0.23 in 2000 to $0.83 in 2007. What was the annual growth rate?

A. 2.61%

B. 20.12%

C. 37.29%

D. 260.87%

38. **Dividend Growth** Annual dividends of Pfizer, Inc. (PFE) grew from $0.38 in 2000 to $1.15 in 2007. What was the annual growth rate?

A. 2.02%

B. 17.14%

C. 28.95%

D. 202.63%

39. **Value a Constant Growth Stock** Financial analysts forecast Best Buy Company (BBY) growth for the future to be 13 percent. Their recent dividend was $0.49. What is the value of their stock when the required rate of return is 14.13 percent?

A. $3.92

B. $4.90

C. $43.36

D. $49.00