1. A stock is expected to pay $2.40 in dividends next year. The dividends are expected to grow at 3% per year subsequently in perpetuity. The opportunity cost of capital for the stock is 15% per year compounded quarterly. What is the value of this stock based on expected future dividend?
2. Quantitative Problem: After a 4-for-1 stock split, Perry Enterprises paid a dividend of $1.70 per new share, which represents a 7% increase over last year's pre-split dividend. What was last year's dividend per share? Round your answer to the nearest cent. $_____