1. An issue of common stock is selling for $58.20. The year end dividend is expected to be $2.95 assuming a constant growth rate of 7%. What is the required rate of return?
14.1
11.6
12.6
12.1
2. If expected dividends grow at 4% and the appropriate discount rate is 6%, what is the value of a stock with an expected dividend of $2.05?
$51.25
$102.50
$103.50
$153.75