A) Tom company's last dividend was $1.25. The dividend growth rate is expected to be constant at 15% for 3 years, after which dividends are expected to grow at a rate of 8% forever. If the firm's required return (rs) is 11%, what is its current stock price?
B) BBB Inc's the free cash flows (in millions) shown below. The weighted average cost of capital is 10.0%, and the FCFs are expected to continue growing at a 5.0% rate after Year 3. What is the firm's total corporate value, in millions?
Year 1 2 3
FCF -$15.0 $10.0 $40.0