Question 14 (4 points) You won a lottery worth $1 million. You have 2 choices on how to receive it: Option A: Receive $1 million immediately and be taxed at 40%. Option B: Receive $100,000 each year for next 10 years at the end of each year, being taxed every year at 20%. Your required rate of return is 10%. Which option would you prefer? Option A Both are equally attractive Option B Question 15 (4 points) A firm JUST booked a net income of $500 million. It is expected to grow at 5% every year forever. The firm has a constant payout policy of paying 10% dividend out of its net income. Its cost of equity is 20%. It has 5 million shares outstanding. What should be the fair stock price now? $28.5 $103 $65 $52.5