1. Global Exporters recently announced that it will pay annual dividends of $1.10; $1.25, and $1.30 a share over the next three years, respectively. After that, the firm plans to increase its dividend by 2.5 percent annually. What is one share of this stock worth to you today if you require an 11 percent rate of return?
2. Suppose your company is given a $50 coupon to purchase Gadgets, show and discuss the budget constraint before the increase in the price of Widgets. If the company had been given a $50 cash discount to augment its constraint, how would the cash discount have altered the options of the company?