1. Briley, Inc., is expected to pay equal dividends at the end of each of the next two years. Thereafter, the dividend will grow at a constant annual rate of 5.2 percent, forever. The current stock price is $57. What is next year’s dividend payment if the required rate of return is 11 percent?
2. The market risk premium is 6%. The beta of Delta Airlines is 1.1 and Delta's required return on equity is 10. Find the risk-free rate. Round your answer to four decimal places.
3. The beta for IBM is 1.49. The risk-free rate is 3.4% and the market risk premium is 8%. What is the expected return on IBM's stock? Round your answer to four decimal places.