1. What's the value of a preferred stock if we assume it has an annual dividend $1 per share and the required rate of return is 10%? ______
$ 5
$ 10
$ 50
$ 20
2. How to calculate the nominal risk-free rate? ______
Approximately equal to real risk-free rate.
Approximately equal to real risk-free rate times expected inflation rate.
Approximately equal to real risk-free rate plus the expected inflation rate.
Approximately equal to real risk-free rate minus the expected inflation rate.