1. Robert's factory currently pays a $0.5 common stock dividend (d0). Dividends have been recently growing at an 8 % annual rate and are expected to continue growing at this rate for the foreseeable future. What is the current value of roberts factory common stock to an investor who requires an 11% rate of return?
2. H and L Inc. forecasts the free cash flow of 15 million today. The weighted average cost of capital is 13%, and the FCFs are expected to continue growing at a 5% rate after Year 3. Assuming that the growth is expected to remain constant in Year 3 and beyond, what is the value of operations, in millions?