1. You looked up the following information on the stock: the latest dividend paid was $2 per share, it is expected to grow at a constant rate of 4% and you observe the current stock price to be $50. Find: a. Dividend yield b. Capital gains yield c. Total expected return for the coming year.
2. The Knit-Purl Company Pty Ltd would like to take advantage of $5 million of positive NPV projects. What long-term financing strategy would you suggest Knit-Purl should use?