1. Given the following information for the stock of Foster? Company, calculate the risk premium on its common stock.
Current price per share of common stock ?$56.37
Expected dividend per share next year ?$3.51
Constant annual dividend growth rate 6% ?
Risk-free rate of return 4?%
2. Lenders that do not securitize the mortgage loans they originate, but retain the loans on their books, are referred to as
A) Mortage bankers
B) Non-bank lenders
C) Portfolio lenders
D) Hedge fund lenders