1. Fauver Enterprises declared a 4-for-1 stock split last year, and this year its dividend is $1.20 per share. This total dividend payout represents a 13% increase over last year's pre-split total dividend payout. What was last year's dividend per share? Round your answer to the nearest cent.
2. The Up and Coming Corporation's common stock has a beta of 0.8. If the risk-free rate is 4.5 percent and the expected return on the market is 11 percent, what is the company's cost of equity capital? (Do not round your intermediate calculations.)
3. Suppose that the cumulative probability of a company defaulting by years one, two, three and four are 3%, 6.5%, 10.5%, and 14.5%, respectively. What is the incremental probability of default in the fourth year?