Thank You

1)

Financial Technology Corp. is expected to pay a dividend of $3 today but dividends are expected to grow at 5% per year going forward. The required return is 7%. What is the price expected to be in year 3?

$182.33

$173.64

$185.55

$165.38

None of the above.

2)

River Falls Co. is expected to pay a dividend of $1.50 per share one year from now. After that, the dividend is expected to grow at a constant rate of 5% per year in the future. The company's beta is 1.2, the market risk premium is 5.5%, and the risk-free rate is 3%. What is the company's current stock price?

$42.86

$34.24

$45.00

$32.61

None of the above.