1. The common stock of Eddie's Engines, Inc. sells for $37.13 a share. The stock is expected to pay $3.10 per share next year (Year 1). Eddie's has established a pattern of increasing their dividends by 5.2 percent annually and expects to continue doing so. What is the return on this stock?
2. It will cost $3,000 to acquire a small ice cream cart. Cart sales are expected to be $2,200 a year for four years. What is the payback period of the ice cream cart?