1) A company currently pays a dividend of $3.25 per share (D0 = $3.25). It is estimated that the company's dividend will grow at a rate of 19% per year for the next 2 years, and then at a constant rate of 5% thereafter. The company's stock has a beta of 1.75, the risk-free rate is 4.5%, and the market risk premium is 6%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.
2) Current and projected free cash flows for Radell Global Operations are shown below.
Actual Projected
2016 2017 2018 2019
Free cash flow $609.72 $670.40 $710.45 $753.08(millions of dollars)
Growth is expected to be constant after 2018, and the weighted average cost of capital is 10.6%. What is the horizon (continuing) value at 2019 if growth from 2018 remains constant? Round your answer to the nearest dollar. Round intermediate calculations to two decimal places.