1. A company's most recent annual Free Cash Flow is $180,000,000. Free cash flow is expected to grow by 15% per year for the next 10 years and then grow by 3% per year thereafter. Investors required rate of return is 11%. What is the current value of the stock?

$11,300,755,080

$2,250,000,000

$5,404,011,121

$1,636,363,636

2. In the beginning of 2017, a bonds yield to maturity is 7.40%. It includes a 1.90% inflation risk premium. In 2017, actual inflation in the economy was 2.10%. What is the bond's real rate of return in 2017? Ignore other risk factors. You expect to hold the bond until maturity.

7.40%

5.30%

7.60%

5.50%