1 a: The risk-free rate is 3.40% and the market risk premium is 6.47%. A stock with a of 0.86 just paid a dividend of $1.43. The dividend is expected to grow at 24.14% for five years and then grow at 3.83% forever. What is the value of the stock?

b: Caspian Sea Drinks needs to raise $95.00 million by issuing additional shares of stock. If the market estimates CSD will pay a dividend of $2.98 next year, which will grow at 3.27% forever and the cost of equity to be 13.35%, then how many shares of stock must CSD sell?

c: Suppose the risk-free rate is 2.57% and an analyst assumes a market risk premium of 5.03%. Firm A just paid a dividend of $1.45 per share. The analyst estimates the of Firm A to be 1.45 and estimates the dividend growth rate to be 4.16% forever. Firm A has 262.00 million shares outstanding. Firm B just paid a dividend of $1.54 per share. The analyst estimates the of Firm B to be 0.82 and believes that dividends will grow at 2.91% forever. Firm B has 199.00 million shares outstanding. What is the value of Firm A?

d: Suppose the risk-free rate is 3.16% and an analyst assumes a market risk premium of 6.44%. Firm A just paid a dividend of $1.46 per share. The analyst estimates the of Firm A to be 1.22 and estimates the dividend growth rate to be 4.83% forever. Firm A has 284.00 million shares outstanding. Firm B just paid a dividend of $1.79 per share. The analyst estimates the of Firm B to be 0.88 and believes that dividends will grow at 2.53% forever. Firm B has 192.00 million shares outstanding. What is the value of Firm B?