1) Nat-T-Cat Industries just went public. As a growing firm, it is not expected to pay a dividend for the first five years. After that, investors expect Nat-T-Cat to pay an annual dividend of $1.00 per share (i.e., D6 = 1.00), with no growth. If the required return is 10%, what is the current stock price?

2) . Analysts are projecting that CB Railways will have earnings per share of $3.90. If the average industry PE ratio is about 25, what is the current price of CB Railways?