1. The Ramirez Company's last dividend was $1.75. Its dividend growth rate is expected to be constant at 25% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return is 12%. What is the best estimate of the current stock price?

a. $43.71

b. $42.53

c. $53.09

d. $52.30

2. The 5-year average trailing P/E of a stock is 18x. The last year EPS was $4.25 and the estimated EPS for the next year is $4.50. Company also paid a dividend of $3.00 last year and is expected to pay a dividend of 3.10 next year. Based on the companys own trailing P/E, the stock is worth

a. $54.00

b. $55.80

c. $76.50

d. $81.00