1. A stock was purchased at $23, sold exactly two years later at $25.50, and paid a $0.70 dividend per year. What was the annual return on investment?
2. Next year's earnings are estimated to be $4. The company plans to reinvest 20% of its earnings at 15%. If the cost of equity is 7%, what is the present value of growth opportunities?
3. You are considering acquiring a common share of Sahali Shopping Center Corporation that you would like to hold for 1 year. You expect to receive both $1.65 in dividends and $25 from the sale of the share at the end of the year. The maximum price you would pay for a share today is __________ if you wanted to earn a 11% return.