1. The Horizon Company just paid a dividend of $.75 per share, and that dividend is expected to grow at a constant rare of 5.50% per year in the future. The company's beta is 1.15, the market risk premium is 8%, and the risk-free rate is 2.00%. What is the company's current stock price?
a. $13.88
b. $14,97
c. $17,39.
d. $23,27.
2. The last dividend just paid by Romanis & Company was $1.00. The company's dividend growth rate is expected to be a constant 25% for the next 3 years, after which dividends are expected to grow at a rate of 12% forever. The stockholders' required rate of return is 14%. What is the equilibrium price of the stock?
a. $78.44
b. $77.44
c. $68.38
d. $72,19