1. TNT, Inc., forecasts the dividend one year from now at $3.24. The dividends are expected to grow at 2.5% per year, indefinitely. If you require a 7.5% rate of return on this stock, what is the most you will pay for the stock?
a. $43.20
b.$44.28
c. $64.80
d. $66.42
2. Which of the following is not an example of a source of systematic risk
a. interest rate changes
b. foreign competition with an industry's products
c. changes in the overall economic outlook
d. changes in the inflation rate