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1) The Howe Company is expected to grow at 12% for the next year, then at 10% for another year, and thereafter, to settle down to a growth rate of 6% for the indefinite future

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1) The Howe Company is expected to grow at 12% for the next year, then at 10% for another year, and thereafter, to settle down to a growth rate of 6% for the indefinite future. The last dividend payment was $4.00 and dividends are expected to increase in proportion to the growth of the firm. You require a 10% return on your investment.

Calculate the fair price for Howe common stock today.

2) Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 7% rate. Dozier's weighted average cost of capital is WACC = 13%.

Year                     Cash flows

1                               -$20

2                                $30

3                                $40

Suppose Dozier has $10 million in marketable securities, $100 million in debt, and 10 million shares of stock. What is the intrinsic price per share?