1.2.

LED Corp.'s common stock paid $2.50 in dividends last year (Do). Dividends are expected to grow at a 12-percent annual rate forever. If LED's current market price is $40.00, and your required rate of return is 23 percent, should you purchase the stock? No, the stock is overpriced. Not enough information is given. No, the percentage return on the stock is too high, thus it is too risky. Yes, the stock is expected to return more than you require. Which of the following parity conditions is (are) correct? The purchasing-power parity theory states that in the long run exchange rate changes tend to reflect international differences in inflation rates. The international Fisher effect states that national interest rate differentials are the result of inflation differentials. All of the above are correct. The interest-rate parity theory states that the forward premium/discount should be equal and opposite in size to the national interest rate differential