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1. Hogwarts Inc. recently paid a dividend (D₀) of $2.50. Ant Man, the CFO for Hogwarts Inc. expects to have non-constant growth of 12% for 2 years followed by a constant rate of 3% thereafter. What will be Hogwarts required rate/return if 12%.

Calculate what Hogwarts intrinsic value is P₀ (P-hat subscript 0)?

(Hint: you first need to calculate up to year 2, and then calculate the horizon value that starts at the end of year 2 two-step process) (From there, you calculate the NPV by inputting the CFs - not that many CFs)

2. The Justice League has an expectation that it will produce $50 million in free cash flow next year, and their FCF is expected to grow at a constant rate of 3% per year indefinitely. The Justice League has no preferred stock or debt, and its WACC is 8%.

If The Justice League has 20 million shares of stock outstanding, what is the stocks value per share?

(Hint: you first need to calculate the value of the firm and then use that amount to get your Equity value per share)