1. You own a portfolio that has $4,000 invested in Stock A and $1,500 invested in Stock B. The expected returns on these stocks are 14 percent and 9 percent, respectively. What is the expected return on the portfolio?
2. Garbanzo Corporation generated free cash flow of $96 million this past year. For the next two years, the company's free cash flow is expected to grow at a rate of 9%. After that time, the company's free cash flow is expected to level off to the industry long-term growth rate of 3% per year. If the cost of capital is 12% and Garbanzo Corporation has cash of $166 million, debt of $217 million, and 50 million shares outstanding, what is Garbanzo Corporation's expected current share price?