1. Manny Bills receives an annuity that pays $2000 at the end of each month. He wishes to replace it with an annuity that has the same term and has only one payment each year and that payment should be at the beginning of the year. How much should the payments be if the exchange is based on a nominal interest rate of 6% quarterly?
2. The stock of Le Blanc, Inc. currently sells for $80 per share. Total return on the stock is evenly divided between capital gain yield and dividend yield. The firm will maintain a constant dividend growth rate. What is the current dividend per share if the required return on stock is 12%?