1. Apple currently pays no dividend but is expected to pay its first annual dividend of $5/share 5 years from today. After that, the dividends are expected to grow at 3% forever. If the required return is 11%, what is the price of the stock today?

2. Amazon is an all-equity firm assuming perpetual EBIT of $300,000. The current cost of equity is 12% and the tax rate is 21%. The company is in the process of issuing $900,000 perpetual bonds with an annual coupon rate of 6% at par. What is the value of the levered firm?