1. Acme Corporation just paid a dividend of D1 = $1.72. Analysts expect the company's dividend to grow by 10% between year 1 and 2, and at a constant rate of 5% from year 2 to 3 and continue with the 5% thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stock’s current market value?
a $41.59
b $42.65
c $43.75
d $44.97
e $45.99
2. A debt holder would be primarily concerned with which of the following multiples?
I. Enterprise (Transaction) Value / EBITDA
II. Price/Earnings
III. Enterprise (Transaction) Value / Sales
A) I and II only
B) II only
C) I and III only
D) I, II, and III