1. A company just paid a dividend of $1.50 per share. You expect the dividend to grow 14% over the next year and 9% two years from now. After two years, you have estimated that the dividend will continue to grow indefinitely at the rate of 6% per year. If the required rate of return is 11% per year, what would be a fair price for this stock today? (Answer to the nearest penny.)

2. A company just paid a dividend of $1.30 per share. The consensus forecast of financial analysts is a dividend of $1.80 per share next year, $2.40 per share two years from now, and $2.90 per share in three years. You expect the price of the stock to be $27 in two years. If the required rate of return is 11% per year, what would be a fair price for this stock today? (Answer to the nearest penny.)