King Gnu Inc.’s first quarterly dividend of $2 per share is expected to be paid 6 months from today. From then on, dividends will grow by 2% per quarter for three years (for 12 quarters following the first payment). After three years, the dividends will start declining by 1% per quarter in perpetuity. Assume that King Gnu Inc.’s required rate of return is 15% (Effective semi-annual rate). What is the price of a share of King Gnu Inc.’s today?

Onitsuka Tiger (オニツカタイガー) just paid a dividend of $3.50 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a 14 percent return on the stock for the first three years. A 12 percent return for the next three years, and a 10 percent return thereafter. What is the current share price?

Onitsuka Tiger (オニツカタイガー) is expecting a period of intense growth, so it has decided to retain more of its earnings to help finance that growth. As a result, it is going to reduce its annual dividend by 10% a year for the next three years.