Question 1 Suppose a firm’s free cash flows are expected to be $27,157 at the end of the current period and are expected to grow three percent each period thereafter. If the cost of capital is 11.8-percent per period and the market value of debt is $149,621, calculate the fair market value of the equity capital i.e. market capitalization.

Question 2 Suppose a firm’s free cash flows are expected to be $24,621 at the end of the current period and are expected to grow three percent each period thereafter. If the cost of capital is 10.9-percent per period and the market value of debt is $123,105, calculate the fair market value of a single share of stock if there are 8,000 shares outstanding.

Question 3 What is the price of a stock with a price to earnings ratio of 14 and earnings per share of $2.5?

Question 4 Suppose a common stock pays dividends at the end of each period and the stock has just paid a dividend in the amount of $2.6. If the stock's dividend growth rate is 5.1-percent per period and the discount rate is 11.4-percent per period, what is the expected return from capital gain in the next period based on the fair value from the constant growth stock valuation model.

Question 5 Suppose a firm pays a dividend on it's stock at the end of every period, the stock beta is 1.2, the firm just paid a dividend in the amount of $3.8, and dividends are expected to grow two percent every period forever. If the expected return on the market is 10.2-percent and the risk free rate is 2.5-percent, what is the most you should pay for the stock based on the CAPM and constant growth stock valuation model.

Please show all work.