1. An investor purchased a holding of common stock two months before payment of the next dividend was due. Dividends are paid annually and it is expected that the next dividend will be an amount of 12 per share. The investor anticipates that dividends will grow at a rate of 4% per annum in perpetuity. Calculate the price per share that the investor should pay to obtain a return of 7% per annum effective. 2. An investor sells short 500 shares of stock at 10 per share and covers the short position one year later when the price of the stock has declined to 7.5. The margin requirement is 50%. Interest on the margin deposit is 8% effective. Four dividends of 0.15 per share are paid. Calculate the yield rate