1. Your bank account pays interest with an EAR of 7%. What is the APR quote for this account based on semiannual? compounding? What is the APR with monthly? compounding?? (Note: Be careful not to round any intermediate steps less than six decimal? places.)
2. A stock is trading at $60 per share now. the stock is expected to pay $1.50 dividends at the end of the year. Dividends are expected to grow at a constant rate g through time.The stocks required rate of return is 10%. (1) What is the growth rate of dividends g? (2) What is the expected stock price two years from now?