1. Google just paid its annual dividend of $2.00/share. The company has been reducing the dividends by 11% every year. How much are you willing to pay today to buy stock in the company if your required rate of return is 13%?

2. MSFT currently has 20,000 shares of stock outstanding. It is considering issuing $200,000 of debt at an interest rate of 8%. The break-even EBIT between these two capital structure options is $160,000. For this to be true, what is the current stock price? Assume no taxes.