question 1

Tresnan Brothers is expected to pay a $2.70 per share dividend at the end of the year (i.e., D₁ = $2.70). The dividend is expected to grow at a constant rate of 6% a year. The required rate of return on the stock, r_s, is 8%. What is the stock's current value per share? Round your answer to the nearest cent.

$ ________

question 2

Scampini Technologies is expected to generate $125 million in free cash flow next year, and FCF is expected to grow at a constant rate of 4% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 14%, and it has zero nonoperating assets. If Scampini has 40 million shares of stock outstanding, what is the stock's value per share? Do not round intermediate calculations. Round your answer to the nearest cent.

Each share of common stock is worth $_____________ , according to the corporate valuation model.

Question 3

Farley Inc. has perpetual preferred stock outstanding that sells for $46 a share and pays a dividend of $3.75 at the end of each year. What is the required rate of return? Round your answer to two decimal places.

_____ %