1) Which year's stock price can be considered as the PV sum equivalence of the dividends: D5, D6, ....DN, ....

Select one:

a.P4,the price at the end of year 4

b.P5, the price at the end of year 5

c.P6 , the price at the end of year 6

d.PN, the price at the end of year N

2) Big Red Automotive just paid a dividend of $5 this year.If you expect the dividend to increase by 6% annually and similar stocks in the market require a rate of return of 18%.What is the estimated stock intrinsic value?

Select one:

a.$44.17

b.$43.56

c.$46.28

d.$42.17