The stock of Smashburger Inc. is currently trading at a price of $40. Smashburger is expected to pay a dividend of $3.00 per share one year from now (t = 1) and then the dividend is expected to grow at a constant growth rate g_L. Assuming that the market is in equilibrium, the risk free rate of return is 5.2%, the market risk premium is 6%, and that the beta of Smashburger is 0.8, what is the long run growth rate g_L?

Group of answer choices

2.5%

3.4%

4.2%

5.7%

Delta Inc. just paid a dividend (D₀) of $2.15 per share. In the next 4 years Delta Inc. is expected to grow at an abnormal rate of 75% per year. Then, the firms dividends are expected to grow at a constant long-run growth rate of 5%. Assuming that Deltas cost of equity (r_S) is 18%, what is the intrinsic value (price) per share of Deltas stock?

Group of answer choices

$109.34

$82.65

$77.50

$70.04