1. Your broker offers to sell you shares of Wingler & Company common stock, which paid a dividend of $2 yesterday. You expect the dividend to grow at a rate of 5% per year into perpetuity. If the appropriate rate of return for the stock is 12%, what is the market value of Wingler's stock?
2. You just signed a consulting contract that will pay you $45,000, $61,000, and $92,000 annually at the end of the next three years, respectively. What is the present value of these cash flows given a 10.5 percent discount rate? Show your work.