1. An investor receives a $30 dividend on her share of preferred stock, valued at $375.
What rate of return is she earning?
a. 10%
b. 8%
c. 6%
d. 7%
2. The price of a share of stock is $25 and the current expected rate of return is 15%, with a constant growth rate or 3%.
What is the next expected dividend?
a. $3
b. $4.50
c. $3.50
d. $2.50