2. Dividends per share of a company are expected to be $3, $5, and $4 for the next three years. Thereafter, the trend rate of growth is forecast to be 10% annually. To obtain a return of 15%, an investor would be willing to pay approximately $______ for the stock.
3. Donaldson,Inc. spends $1116,000 a week to pay billsand maintains a lower cash balance of limit of $35000.The standard deviation of disbursements is $9000. The applicable weekly interest rate is 0.05% and the fixed cost of transferring funds is $12. What is your optimal average cash balance based on the Miller-Orr model?