答案和详解如下：

6.Suppose the equity required rate of return is 10 percent, the dividend just paid is $1.00 and dividends are expected to grow at an annual rate of 6 percent forever. What is the expected price at the end of year 2?

A)   $28.09.

B)   $29.78.

C)   $27.07.

D)   $17.67.

The correct answer was B)

The terminal value is $29.78, and that is the price an investor should be willing to pay at the end of year 2. The correct answer is shown below.

7.The value per share for Burton, Inc. is $32.00 using the Gordon Growth model. The company paid a dividend of $2.00 last year. The estimates used to calculate the value have changed. If the new required rate of return is 12.00% and expected growth rate in dividends is 6%, the value per share will increase by:

A)   10.42%.

B)   4.17%.

C)   4.00%.

D)   9.51%.

The correct answer was A)

The value per share using the new estimates is $35.33 = [$2.0(1.06) / 0.12 - 0.06)] and the percentage increase in the value per share will be 10.42% = [(35.33 - 32.00)/32.00] *  100%.