1. JJ Industries will pay a regular dividend of $0.50 per share for each of the next five years. At the end of the five years, the company will also pay out a $57 per share liquidating dividend. What is the current value of the company’s stock if the cost of equity is 12%?
2. You are valuing ABC Inc. using the FCF model, and you have arrived at an equity beta of 1.3 for this company. The firm has a debt-to-equity ratio of 0.5 and a corporate tax rate of 30%. What is ABC’s asset beta?