1. Emily Cara Enterprises' stock currently sells for $35.50 per share, which is also its intrinsic value. The dividend is projected to increase at a constant rate of 5.50% per year. The required rate of return on the stock, rs, is 9.00%. What is the stock's expected price 3 years from today?
2. Interest Rate Parity [L02] Use Figure 21.1 to answer the following questions: Suppose interest rate parity holds, and the current six-month risk-free rate in the United States is 1.4 percent. What must the six-month risk-free rate be in Great Britain? Japan? Switzerland?