I am stuck on these two questions for my finance homework. No excel, please.

1. Tailor Swiftly, LLC. (still love this name . . . ) is a young, start-up company that does fast-turnaround alterations. The stock is currently priced at $38.00/share. The company has just paid a $4.00/share dividend. The dividend is expected to grow at 10% next year, 8% for the next two years, and then grow for 3% per year thereafter. Your required rate of return is 15%. Would you buy this stock? Why or why not? Be specific. (12 points)

Please show your work including your stock valuation.

2.

Hints:

1. Find the average P/E
2. Find the average growth in EPS (earnings per share)
3. Project the EPS for 2014
4. Apply the average P/E ratio to find the share price in 2014

Given the information below for Seger Corporation, compute the expected share price at the end of 2014 using price ratio analysis. (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "$" sign in your response.) 2008 2009 2010 2011 2012 2013 Price $ 84.90 $ 90.80 $ 89.50 $ 87.00 $ 108.50 $ 123.90 EPS 2.70 3.41 4.21 4.91 7.65 8.65 CFPS 7.92 8.76 9.10 10.77 12.19 13.36 SPS 66.50 71.50 70.90 74.40 85.60 93.60 Year