1. The dividend for Weaver, Inc., is expected to grow at 22 percent for the next 4 years before leveling off at a 5.1 percent rate indefinitely. If the firm just paid a dividend of $1.3 and you require a return of 14 percent on the stock, what is the most you should pay per share?
2. Bill’s Bakery expects earnings per share of 5 = $5 next year. Current book value is $4.5 per share. The appropriate discount rate for Bill's Bakery is 12.5 percent. Calculate the share price for Bill's Bakery if earnings grow at 4.9 percent forever.