Holtzman Clothiers's stock currently sells for $20.00 a share. It just paid a dividend of $3.00 a share (i.e., D₀ = $3.00). The dividend is expected to grow at a constant rate of 9% a year.

What stock price is expected 1 year from now? Round your answer to the nearest cent. $ ______

What is the required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. ____%

Question 2

What will be the nominal rate of return on a perpetual preferred stock with a $100 par value, a stated dividend of 12% of par, and a current market price of (a) $69, (b) $79, (c) $95, and (d) $137? Round your answers to two decimal places.

1. ___ %
2. ____%
3. ___ %
4. _____%

Question 3'

Assume that today is December 31, 2021, and that the following information applies to Abner Airlines:

After-tax operating income [EBIT(1 - T)] for 2022 is expected to be $500 million. The depreciation expense for 2022 is expected to be $150 million. The capital expenditures for 2022 are expected to be $325 million. No change is expected in net operating working capital. The free cash flow is expected to grow at a constant rate of 5% per year. The required return on equity is 16%. The WACC is 12%. The firm has $192 million of nonoperating assets. The market value of the company's debt is $4.008 billion. 80 million shares of stock are outstanding.

Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent.

$ ____