1. The Retail Box has an historical P/CF ratio of 21.5. The projected CFPS growth rate is 5.6 percent. The current EPS is $2, the current P/E ratio is 14.2 and the current P/CF ratio is 20. Using the P/CF ratio model, what is the expected price of this stock?
2. Grott and Perrin, Inc., has expected earnings of $3 per share for next year. The firm's ROE is 20%, and its earnings retention ratio is 70%. If the firm's market capitalization rate is 15%, what is the present value of its growth opportunities?