1. If a company has paid dividends in the last four years of 7.00, 1.00, 2.00, and 5.00 respectively and the next dividend will be 4.75. The price of the stock is 80.00. The stock risk is equal to the overall market and the t-bill rate is 1.2% and the market risk rate is 8%, what is the cost of equity?
2. Geany, Inc. is expected to have EPS in the upcoming year of $8.8. The expected ROE is 14%. An appropriate required return on the stock is 12.8%. If the firm has a plowback ratio of 59%, what is the expected dividend in the upcoming year?