1) Gamma corporation just paid a dividend of $3.00 per share on its common stock. Dividends are expected to grow at an annual rate of 8% for the next two years and then at 3% thereafter. If you want to earn a minimum return of 10%, what is the most that you would be willing to pay for a share of Gamma Corporation today?
2) Susan purchased Eastern Industries stock for $56.85 per share and sold it 18 months later for 59.95 after receiving a cumulative dividend of $2.75 at the end of 18 months. What was Susan’s holding period return(HPR), annual percentage rate(APR), and compound annualized return, respectively?