1. The historical market risk premium on small firm common stocks has been about 13.6%. Assume the risk-free rate is 0.13%. BroadVision Inc. has a beta of 0.98. What return should you expect from an investment in BroadVision Inc.?
2. You buy a stock for $15 per share and sell it for $20 after holding it for slightly over a year and collecting a $1.50 per share dividend. Your ordinary income tax rate is 28% and your capital gains tax rate is 20%. Your after-tax rate of return is _______.