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.

Year	Dividend
1	$1.0600
2	$1.1236
3	$1.1910
V3:	$1.191/(0.10 – 0.06) = $29.78

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%.

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.

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%.