5. A firm's most recent dividend was $4.00.The firm is expected to grow by 16% for the next two years, and then grow by 8% forever (i.e. to infinity). The required rate of return on equity is 10%. Calculate today's stock price. (10 points).

6. Explain the key factors that determine the yield on a given interest-paying security(i.e. bond). Explain how each of these factors determines why the yield is different between one security and another. How can this analysis be used to estimate the risk-free rate of return? (12 points).