1. A company had sales of $20 million, with a net profit margin of 25%. Further, the firm had depreciation expense of $500,000, and increased investment in working capital and fixed assets by $200,000 and $400,000 respectively. You expect free cash flow to grow at 7%, and require a return of 10%. There are 10,000,000 shares outstanding. The per-share value of the company’s stock is closest to:

a. $13.91

b. $17.48

c. $21.76

2. A firm has total assets of $20 million, and total debt of $15 million. The firm has an ROE of 20%, and 2 million shares outstanding, and a retention ratio of 40%. What is the dividends per share of this firm?

a. $0.20

b. $0.30

c. $0.50