You are considering buying stock in two companies both currently priced at $100. You expect company A to have a stock price of $109 at the end of the year and pay no dividend. If your You expect company discount rate is 10%, the value of company A today is B to have a stock price of $90 at the end of the year and pay a $25 dividend at the end of the year. If your discount rate is 10%, the value of company B today is Based as it is underpriced. on the above information, you should buy (a) $90.08;$81.81; company A (b) $101.05;$104.54; company B (c) $99.09;$104.54; company B (d) $99.09;$81.81; company A Suppose that your start-up company recently had a free cash flow to equity of $2 per outstanding share (assume this $2 per share is not part of the company's valuation). You expect your company to grow at a rate of 15% over the next three years followed by a perpetual growth rate of 5%. The present value of the dividends during the initial growth stage is The present value of the dividends during the second growth stage is . The price an investor with a discount rate of 10% should be willing to pay per share is (a) $7.46;$59.60;$67.06 (b) $7.46;$48.08;$55.54 (c) $6.57;$48.08;$54.65 (d) $6.57;$59.60;$66.17