1. A7X Corp. just paid a dividend of $2.10 per share. The dividends are expected to grow at 21 percent for the next eight years and then level off to a growth rate of 7 percent indefinitely. If the required return is 14 percent, what is the price of the stock today?
2. Which of the following is true of risk-return trade off?
Risk can be measured on the basis of variability of return. T-bills are more riskier than equity due to imbalances in government policies. Risk and return are inversely proportional to each other. Riskier investments tend to have lower returns.