1)What is the PVGO for a firm that will earn $2.00/share next year, will pay out 30% of its earnings, has 9% cost of equity, and a growth rate of 3%?Use the sustainable growth rate equation to explain why the answer is the way it is.

2)What is the PVGO for a firm that will earn $2.00/share next year, will pay out 60% of its earnings, has 5% cost of equity, and a growth rate of 3%?Use the sustainable growth rate equation to explain why the answer is the way it is.

3)Use FCFE to determine the value of a company's stock price when last year's sales were $4.75/share, sales growth is expected to be 2.5% for the next four years and 1.75% after that, profit margin is expected to remain around 18%, return on equity has been averaging 13.5%, and the required rate of return is 8.5%.What is the PVGO and does it constitute a large risk to the stock price?