1. Nate's Great Steaks and Shakes, Inc. is a mature firm that pays a quarterly dividend. The firm just paid a quarterly dividend of $1.00 and the next dividend will be paid a quarter from today. Investors expect Nate's to increase its dividend by 1% every quarter, forever. Nate's has a beta of 1, the annual risk-free rate is 2.381%, and the annual market risk premium is 8%. What should the stock price be today?
2. Quantitative Problem: You own a security with the cash flows shown below. 0 1 2 3 4 0 610 375 230 340 If you require an annual return of 12%, what is the present value of this cash flow stream? Round your answer to the nearest cent. Do not round intermediate calculations.