1. Apple just paid a dividend of $3 per share. You expect that Apple’s dividend will grow at the rate of 20% per year for the next three years. After that, you expect that this rate will drop to10% per year forever. The required rate of return for Apple is 20%. What is the share price of Apple Inc. just before the dividend was paid?
2. You have a portfolio that is well diversified. You are considering adding gold as an asset to your portfolio. What is the most important factor in deciding whether you should add gold to your portfolio or not? Your answer should not be more than one word.