1) The In-Tech Co. just paid a dividend of $1 per share. Analysts expect its dividend to grow at 25% per year for the next three years and then 5% per year thereafter. If the required rate of return on the stock is 18%, what is the current value of the stock?

2) Project Y has following cash flows: C0 = -800, C1 = +5,100, and C2 = - 5,100. Calculate the IRRs for the project.

3) A firm has a general-purpose machine, which has a book value of $300,000 and is worth $500,000 in the market. If the tax rate is 20%, what is the opportunity cost of using the machine in a project?

4) Stock M and Stock N have had the following returns for the past three years: 12%, -10%, 32%; and 15%, 6%, 24%, respectively. Calculate the covariance between the two securities. (Ignore the correction for the loss of a degree of freedom.)