1. Jane is 27 years old and expects to work 33 more years. Her current salary is $58,575, just paid, and she expects it to grow at a constant rate of 4% per year. The discount rate is 8% EAR. What is the present value of Jane's future income stream based on her current salary?

2. You are an equity analyst at Morgan and Morgan, and your forecast of future dividend payments at General Dynamics is as follows: Next years dividend is expected to be $10. This dividend is then expected to grow at 20% for two years and after that at a 5% forever after. Using a discount rate of 10%, what is the present value of the cash flows on GD stock?