1. Big Red Machines, a startup, has come up with a new product and has seen significant customer demand. Due to reinvestment in the firm Big Red Machines will pay no dividends in the first 3 years. Beginning in the 4th through 6th years, the firm expects to earn $4.00, $5.00 and $7.75 per share respectively. The dividend payout ratio declared by the firm is 60% in those three years. In the 7th year, the firm should see stable growth rates and thus distribute dividends that grow at 6% per year. The expected rate of return is 8% on this investment. What is the value of Big Red Machine's stock today? ; Do not round your intermediate calculations. Round your final answer to two decimal places.

2. Big Red Machines, a startup, has come up with a new product and has seen significant customer demand. Due to reinvestment in R&D, the firm Big Red Machines will pay no dividends in the first 3 years. Beginning in the 4th through 6th years, the firm expects to pay $1.50, $1.60, and $1.75 in dividends. In the 7th year, the firm should see stable growth rates and thus begin a divided which grows at 3% per year. You plan to graduate 1 year from now, and hope to invest in Big Red Machines at that time. The expected rate of return is 8% What is the value of Big Red Machine's stock 1 year from today? ; Do not round your intermediate calculations. Round your final answer to two decimal places.

3. A couple will retire in 40 years. They plan to spend $50,000 of their savings each year, with the withdraw coming at the end of the year. They expect retirement to last for 25 years. They believe they can earn 9% interest on retirement savings by investing in high quality mutual funds. They realize too, that in 20 years they will also need to spend $80,000 (one time) to cover costs of their child's education. If the couple makes year-end annual payments starting in year 1 into a savings plan, how much does the couple need to save per year to cover both future college and future retirement costs? (round interim calculations to dollars and cents. Round your answer to the nearest dollar)