1.) The year-end dividend of a company will be $2.40 and this is expected to grow at 4% forever. The required rate of return for the stock is 12%. Calculate the price of the stock. If earnings per share re $3.10 what is the present value of growth opportunities for the company.

2.) A project has an outlay of $40000 that will increase the cash flow of the company by $8000 for each of the next 7 years. At what rate of return would you reject the project?