1. A firm's dividends have grown over the last several years. 9 years ago the firm paid a dividend of $1. Yesterday it paid a dividend of $7. What was the average annual growth rate of dividends for this firm?
2. Why does a company retain a large part of its earnings, instead of paying it out to shareholders as dividends?
3. To what amount will the following investment accumulate? $7,721, invested today for 13 years at 15.45 percent, compounded monthly.