1. Suppose that you purchased 300 sghares of a stock at $36 per share, ignoring all commissions. Assume that stock paid a dividend of $2.15 per share for theyear. The stock price rose to $41.05 per share and was then sold at that price. What was the dividends yield? (round you ranswer to the nearest tenth percent.)

A. 5.2 percent

B. 6 percent

C. 6.5 percent

D. 5 percent

2. Determinants of Interest Rate for Individual Securities A particular security's default risk premium is 3.80 percent. For all securities, the inflation risk premium is 2.80 percent and the real interest rate is 2.65 percent. The security's liquidity risk premium is 1.15 percent and maturity risk premium is 1.70 percent.

The security has no special covenants. What is the security's equilibrium rate of return?

4.95%

24.20%

2.42%

12.10%