1. Your company paid a dividend of $1.50 last year. The growth rate is expected to be 4% for 1 year then 5% per year thereafter. The required rate of return on equity is 8%. What is the expected current stock price?

2. The market’s economic turmoil in 2008 and 2009 was largely a result of:

a. banks’ reluctance to provide loans to low-income families in prior years. b. a reduction in government debt. c. the transfer of American jobs overseas. b and c are correct. none of the above are correct.