1. A drilling company reserves are depleting. Production is falling as are sales, costs are rising as production becomes more difficult, and earnings are expected to decline by 9% per year into perpetuity. The firm just paid a $10 dividend and the cost of equity is 6.5%. What is the value of the stock?

$0.00, as the estimated value was negative
		$140.00
		$58.71
		$64.52

2.

1. Stock E is currently priced at $43.44. It just paid a $1.98 dividend and has a cost of equity equal to 11%. What is the market-implied growth rate of the stock?
   • 4.78%

• • 6.16%

• • 7.44%

• • 7.26%