A company currently pays a dividend of $1.2 per share (D₀ = $1.2). It is estimated that the company's dividend will grow at a rate of 18% per year for the next 2 years, and then at a constant rate of 7% thereafter. The company's stock has a beta of 1.1, the risk-free rate is 8%, and the market risk premium is 3%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.

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2.

Renfro Rentals has issued bonds that have a 10% coupon rate, payable semiannually. The bonds mature in 10 years, have a face value of $1,000, and a yield to maturity of 8.5%. What is the price of the bonds? Round your answer to the nearest cent.

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3.

Maturity Risk Premium

The real risk-free rate is 2%, and inflation is expected to be 4% for the next 2 years. A 2-year Treasury security yields 6.8%. What is the maturity risk premium for the 2-year security? Round your answer to one decimal place.

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