1. What is the intrinsic value of company ZZZs common stock today? ZZZ is expected to pay a $1.75 dividend at the end of next year and ZZZ is expected to sell for $60 at the end of next year. ZZZ has a required rate of return of 13.4%

Answer: 54.45....But how????

2. Company NN has preferred stock outstanding that currently sells for $45 a share and no maturity date. The preferred stock pays a preferred dividend of $4 per year. What is the expected rate of return of Company NNs preferred stock? What would happen to the price of NNs preferred stock next year if interest rates dropped 0.5% next year?

Answer: 47.62.....But how????