1. ABC Industries plans on reinvesting heavily in itself for the next few years. The company plans to pay a $6 dividend next year, which will decrease by 3% for two years. After that, dividends are expected to grow at a 5% rate, indefinitely. If investors require a 10% return, what is the value of ABC stock?
2. Suppose an investment offers to double your money in 18 months (don’t believe it). What rate of return per quarter are you being offered? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Rate of return %