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(5pts) 15. El Taco Tote just paid a dividend of D. - $1.75 per share, and that dividend is expected to grow at a constant rate of 5.50% per year in the future. The company's beta is 1.50, the required return on the market is 9.50%, and the risk-free rate is 3.50%. What is the company's current stock price? (5pts) 16. IST Co. is undergoing a restructuring, and its free cash flows are expected to vary considerably during the next few years. However, the FCF is expected to be $200,000,000 in Year 4, and the FCF growth rate is expected to be a constant 2% beyond that point. The WACC is 10.0%. What is the horizon (or continuing) value at t = 4? (10pts) 17. Durmush Technologies was founded 8 years ago in NIGDE. It has been profitable for the last 5 years, but it has needed all of its earnings to support growth and thus has never paid a dividend. Management has indicated that it plans to pay a $0.25 dividend 3 years from today, then to increase it at a relatively rapid rate for 2 years, and then to increase it at a constant rate of 8.00% thereafter. Management's forecast of the future dividend stream, along with the forecasted growth rates, is shown below. Assuming a required return of 11.00%, what is your estimate of the stock's current value? Year Growth rate Dividends 0 NA $0.000 1 NA $0.000 2 NA 50.000 3 NA 50.250 4 30.00% $0.325 5 15.00% $0.374 6 8.00% $0.404

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