1. A firm plans to issue common stock and the first dividend payment is expected to be $1.10 per share; The firm will issue each share at $20.00. If investors expect an annual dividend growth rate of 5% forever, then what is the implied return that they expect to earn on these shares?

• 10%

• 5%

• 10.5%

• 5.5%

• none of the choices

2. You are a real estate owner in Bloomington Indiana and you have rented a house to students. You expect to make 6% per year on this leasehold investment. The terms of the lease are for 24 months and the rent is due at the beginning of the month. Your savvy renters are Kelley students and they request that the rent be paid, instead, at the end of the month. How much more will the investor receive as a result of payments at the beginning of the month rather than the student's proposed payments at the end of the month over the entire life of the lease?

• $1800

• $162.67

• $2108.46

• $315.88

• $1408.49