1. ABS Corporation’s free cash flow during the just-ended year (t=0) was $300 million, and its FCF is expected to grow 6.5% into the future. If the weighted average cost of capital is 11.5%, what is the firm’s total corporate value, in millions?
2. Allen’s Corporation just paid a dividend of D0=$0.65 per share, and that dividend is expected to grow at a constant rate of 7.00% per year in the future. The company’s beta is 1.10, the required return on the market is 12%, and the risk-free rate is 4.75%. What is the company’s current stock price?