1. Jackson Street Repair’s stock currently sells for $55 per share. The market requires a 12% return on the firm’s stock. If the company maintains a constant 5% growth rate in dividends, what was the most recent dividend per share paid on the stock?
2. Consider an asset that costs $810,000 and is depreciated straight-line to zero over its nine-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $185,000. If the relevant tax rate is 30 percent, what is the after-tax cash flow from the sale of this asset?