XYZ Inc. is expected to pay a per-share dividend of $5 next year (D1).It also expects that this dividend will grow at a constant rate of 5 percent.What price would you expect to see for World Wide if the required rate of return is 10 percent?

$25

$75

$50

$100

Today is December 31, 2020.The following information applies to Vermeil airlines:

• After-tax operating income [EBIT(1-T)] for 2021 is expected to be $10 million.
• The company's depreciation expense for 2021 is expected to be $2 million
• The company's capital expenditures for 2021 are expected to be $2 million.
• No change is expected in the company's net operating working capital.
• The company's free cash flow is expected to grow at a constant rate of 5 percent.
• The company's cost of equity is 14 percent.
• The company's WACC is 10 percent.
• The market value of the company's debt is $100 million.
• The company has 5 million shares of stock outstanding.

Using the free cash flow approach (corporate value model), what should the company's stock price be today?

$50

$35

$5

$20