1. Quality Home Made Ice Cream has plans to pay decreasing annual dividends of $1.50, $1.25, and $1.00 over the next three years, respectively. After that, the firm will increase the dividend by 4 percent each year. What is the value of this stock today at a discount rate of 9 percent?
a) $19.93
b) $19.69
c) $19.26
d) $19.54
e) $20.48
2. Contrail Air, Inc. has sales of $1500, Net income of $300, net fixed assets of $700, and current assets of $300. Inventory totals $250.
What is the common-size statement value of inventory?
63%
70%
25%
14%