Reference no: EM132012724

1. A stock is currently priced at $40.5. Its dividend is expected to grow at a rate of 6.1% per year indefinitely. The stock's required return is 10.9%. The stock's predicted price 3 years from now, P3, should be $________.

2. A stock is expected to pay the following dividends: $1.1 four years from now, $1.5 five years from now, and $2 six years from now, followed by growth in the dividend of 6% per year forever after that point. There will be no dividends prior to year 4. The stock's required return is 12%. The stock's current price (Price at year 0) should be $____________.

Do not round any intermediate work, but round your final answer to 2 decimal places (ex: 12.34567 should be entered as 12.35).