1. Black Hills Corporation has a price-earnings ratio of 31. If the interest rate is 8% and the payout ratio is 1, then what is the long run average expected growth rate in earnings for Black Hills. Please provide explanation and formula.

2. How do compare interest rates for, say, one month, and interest rates for, say, 9 months? Be sure to discuss the idea of compounding in your answer.

3. Use annual interest rates to define the meaning of the term compounding? Explain why compounding becomes more important as the time horizon increases.

4. Why cant you add $10 delivered today with $12 delivered one year from now and get a total of $22?