1. Wax Music has a 12.50 percent profit margin and a 70 percent dividend payout ratio. The asset turnover ratio is 0.85 and the assets-to-equity ratio (using beginning-of-period equity) is 1.75. What is Wax Music 's sustainable rate of growth?
9.30%.
5.58%.
6.20%.
13.02%.
2. Suppose that you buy a two-year 9% TIPS (Treasury Inflation-Protected Securities) at its face value. What will be your nominal return on the two-year if inflation is 3% in the first year and 6% in the second year?
19.19%.
29.72%.
34.75%.
38.52%.