1. Rose Inc.'s stock's expected return is 10% the stock's dividend expected to grow at a constant rate of 6%, and it currently sells for $50 a share. Which of the following statements is CORRECT?
a. the stock price is expected to be $53 a share one year from now.
b. the stock price is expected to be $55 a share on year from now.
c. the current dividend per share is $5.00.
d. the stock's dividend yield is 10%..
2. MacRose Funds hired you as a consultant to help it estimate its cost of capital. You have been provided with the following data: D1 = $1.00; P0 = $20.00; and g = 5% (constant) Based on the DCF approach, what is the cost of common from reinvested earnings?
a. 11.00%
b.15.04%
c. 10.00%
d. 5.00%
please, show me your solution.