1. During 2017, Raines Umbrella Corp. had sales of $860,000. Cost of goods sold, Administrative and selling expenses, and depreciation expenses were $610,000, $110,000, and $125,000, respectively. In addition, the company had an interest expense of $95,000 and a tax rate of 35 percent.

2. A company intends to pay dividends of $0.40, $0.60, $0.75, and $1.00 per share for the coming four years, respectively. After that, the expectation is that the dividend will increase at a rate of 3.5% annually. If the appropriate discount rate is 13.5%, what is the present value of the stock?