Problem: California clinics, an investor-owned chain of ambulatory care clinics, just paid a dividend of $2 per share. The firm's dividend is expected to grow at a constant rate of 5% per year, and investors require a 15% rate of return on the stock.
Q1. Explain how each of the four fundamental factors that affect the supply & demand for investment capital, and hence, interest rates, (namely productive opportunities, time preferences for consumption, risk, & inflation) affects the cost of money
Q2. Explain the 3 techniques for solving time value problems.