Holt Enterprises recently paid a dividend, D0, of $2.25. It expects to have nonconstant growth of 12% for 2 years followed by a constant rate of 7% thereafter. The firm's required return is 9%.

1. How far away is the horizon date?

• The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the beginning of Year 2.
• The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2.
• The terminal, or horizon, date is infinity since common stocks do not have a maturity date.
• The terminal, or horizon, date is Year 0 since the value of a common stock is the present value of all future expected dividends at time zero.
• The terminal, or horizon, date is the date when the growth rate becomes nonconstant. This occurs at time zero.

-Select-

• What is the firm's horizon, or continuing, value? Do not round intermediate calculations. Round your answer to the nearest cent.

• What is the firm's intrinsic value today,? Do not round intermediate calculations. Round your answer to the nearest cent.