1. The winner of the first annual Tom Morris Golf Invitational won $115 in the competition which was held in 1901. In 2015, the winner received $1,480,000. If the winner's purse continues to increase at the same interest rate, how much will the winner receive in 2052?
a. $31,920,341.90 b. $29,018,492.64 c. $25,536,273.52 d. $29,464,930.99 e. $35,910,384.64
2. Piedmont Hotels is an all-equity company. Its stock has a beta of 1.15. The market risk premium is 6.5 percent and the risk-free rate is 2.3 percent. The company is considering a project that it considers riskier than its current operations so it wants to apply an adjustment of 1.5 percent to the project's discount rate. What should the firm set as the required rate of return for the project?
a. 9.78% b. 8.63% c. 11.28% d. 7.13% e. 8.28%