Question: 1. Fairfax Pizza stock is currently priced at 86.64 dollars per share and is expected to pay its next dividend, which is expected to be 3.58 dollars, in 1 year. The stock has a beta of 0.48. The market has an expected return of 16.6 percent, the risk-free rate is 5.42 percent, and the inflation rate is 1.9 percent. What is the stock price of Fairfax Pizza expected to be in 1 year?

2. The risk-free return is 3.2 percent, the expected return on the market is 16.24 percent, the expected real return for Litchfield Design stock is 4.39 percent, and the beta for Litchfield Design stock is 0.65. What is the inflation rate expected to be? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.