Use excel spreadsheet for calculations .You are considering an investment in QUX Corporations stock, which is expected to pay a $2.00 dividend per share at the end of the year. The risk of QUX can be measured by its beta of 1.4. The risk-free rate is 4% and the market risk premium is 5%.

QUX stock is currently selling for $20 a share, and its dividend is expected to grow at some constant rate. Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 2 years?

2. Your manager has asked you to compare two possible 5-year projects at your organization. The first named Project Arno has an upfront investment of $100M in Year 0 but then returns level cash flows of $30M in Years 1 and 2 followed by $50M for Years 3 through 5. The second one is named Project Bello with an upfront investment of $5M returning $3M for Years 1 through 5. Your organizations weighted average cost of capital (or required rate of return on projects) equals 12%. Calculate the Net Present Value and the Internal Rate of Return for both projects. Which is the preferred project and why?