1. Firm inc. pays a $1.37 dividend every quarter and will maintain this policy forever. What price should you pay for its stock if you want an annual return of 12.5% on your investment?

A) $43.84 B) $43.94 C) $44.84 D) $44.94

2. ABC just paid an annual dividend of $1.12. If you expect a constant growth rate of 4% and have a required rate of return of 13%, what is the current stock price according to the constant growth dividend model?

A) $12.44 B) $12.94 C) $13.46 D) $14.82

Please show your work.

Thank you.