1. Techfin Consulting, a profitable company, has yet to pay dividends. However, its board has indicated to initiate a $0.25 dividend in 4 years and increase by 30% each year for 2 years before reaching a constant rate at 8% thereafter. Assuming a required return of 10%, estimate the stock's current value?

2. NASA just revealed a major contract with Boeing that would increase Boeings market value by $7.5 billion. It was widely expected by the market that this contract would be awarded to Lockheed-Martin (LMT). Assume that Boeing has 800 million shares outstanding and Lockheed Martin has 425 million shares outstanding. Prior to this announcement, the market felt that the probability of Boeing winning the contract was 10% and that Lockheed-Martin's chance was only about 90%. What do you anticipate will happen to Lockheed-Martin and Boeing's stock prices are a result of this surprise announcement?

3. You expect CCM Corporation to generate the following free cash flows over the next five years shown below. Following year five, you estimate that CCM's free cash flows will grow at 4% per year and that CCM's weighted average cost of capital is 11%. CCM has $200 million of debt and 8 million shares of stock outstanding. First estimate the enterprise value of CCM Corporation and then estimate the share price for CCM.

Year	1	2	3	4	5
FCF ($ millions)	25	28	32	37	40
Year	1	2	3	4	5
FCF ($ millions)	25	28	32	37	40

4. Assuming that Novartis AG (NVS) has an EPS of $3.35, based upon the price-to-earnings ratios for its competitors, estimate the lowest expected stock price for Novartis.

Company	Ticker	Price per Share	Earnings per Share	Book Value per Share	Price/ Earnings	Price/ Book
Abbott Labs	ABT	54.35	3.69	13.79	14.73	3.94
Bristol-Myers- Squibb	BMY	25.45	1.93	7.33	13.19	3.47
GlaxoSmithKline	GSK	41.3	3.15	6.03	13.11	6.85
Johnson & Johnson	JNJ	62.6	4.58	18.27	13.67	3.43
Merck	MRK	36.25	3.81	10.86	9.51	3.34
Pfizer	PFE	$18.30	$1.20	8.19	15.25	2.23
Average					13.24	3.88