1) A stock promises to pay a constant dividend of $4.00 per year every year. If the stock's required rate of return is 20%, what is the price of this stock? 2) Microsoft just gave a dividend of $5.00. You estimate that the dividend will have a constant growth rate of 4% and a dividend will be paid every year. If the required rate of return for Microsoft is 17%, what is the price of Microsoft's stock? Use the following for questions 3 through 6 Facebook has gone public by issuing equity. As an analyst for a bank, you've estimated that the company will have a Beta of 1.2. You know that Facebook just gave a dividend of $4.00 per share. You anticipate high growth of this dividend for the first few years. You predict that dividend will grow by 20% for three years. After that, you anticipate growth to be a more modest 5% per year. The risk-free rate is 2% and the average return of the market is 13%. 3) What is the expected return of Facebook's stock? 4) What is the expected price TODAY of Facebook's stock? 5) What is the dividend yield of the stock this year and next year (from t=0 to t=1 AND from t=1 to t=2)? 6) What is the expected price of the stock next year? Use the following for questions through 10 AAPL has expecting earnings of $8 per share and an ROE of 15%. If AAPL has a plowback ratio of 70% and a cost of capital of 12% answer the following: 7) What is AAPL's current price? 8) What is AAPL's present value of growth options (PVGO)? 9) Calculate the P/E and PEG Ratios 10) Suppose AAPL had an ROE of 12%, calculate AAPL's new price