Question 1: Currently, a treasury bill is paying 1.5% and the inflationary risk premium is 3%. Other risk premiums total 2%. What should the current risk-free rate be?
Question 2: Company has reported that its net income for 2012 was $1,276,351. The firm has 420,000 shares outstanding and a P-E ratio of 11.2 times. What is the firm's price?