1. Blue Sky Airlines has an expected ROE of 12%.

Determine the dividend growth rate if the company elects to pay 40% of its earnings in the form of dividends.

(Enter as a decimal).

2. See Candy had an FCFE of $7.2M last year and has 3.2M shares outstanding. See's required return on equity is 10.6%, and WACC is 9.3%. If FCFE is expected to grow at 6.5% forever, the intrinsic value of See's shares is