1. Tom purchased 100 shares of Dalia Co. stock at a price of $121.86 four months ago. He sold all stocks today for $125.91. During the year the stock paid dividends of $6.04 per share. What is Tom’s effective annual rate? Round the answers to two decimal places in percentage form.
2. The firm announced that it will be pay dividend this year. The firm is 70% as volatile as the JSE ALSI. The 3-month treasury bill rate is 5% and the market risk premium is 12%. The ROE is 18% and dividend payout ratio is 60%. Shares outstanding are 10000 and EACS is 12000. What do you expect the share price to be?