1. Stock XYZ has a current dividend of $4.00 . The dividend is expected to grow at 2.00% per year until year 3 and then at 3.00% per year for the rest of time.
Based on the riskiness XYZ, its discount rate is 6.00% . With this information, what is the dividend yield from today to year 1?
3.00%
6.00%
2.94%
3.21%
3.06%
2.90%
2. You are considering the purchase of new living room furniture that costs $1,420. The store will allow you to make weekly payments of $30.51 for one year to pay off the loan. What is the EAR of this arrangement?
21.10%
22.21%
26.05%
23.51%
24.81%