Q6

9. A stock is selling at $ 15 and next year's dividend (D₁) is expected to be $ 1.53. Assume that dividends will grow at a constant rate of 5 %. What would be the estimated cost of equity for retained earnings estimated from the dividend discount model? Answer as a percentage to the nearest hundredth as in xx.xx% recalling that for two place percentage accuracy, your rate accuracy should be to four places.

10. A firm is buying a new equipment that has the following cash flows:

Year	0	1	2	3
Cash Flow	($409)	$100	$200	$339

What is the NPV if the interest rate is 6%? Answer to the nearest cent as in xx.xx without entering the dollar sign.