#1. Investors receive a total return of 15 percent on the common stock of Nickel and Dime, Inc. The stock is selling for $28.25 a share. What is the constant growth rate (g) of the firm if the company plans to pay an annual dividend of $1.70 a share next year?

#2. Northwest, Inc. stock is selling for $40.59 a share based on a 10 percent rate of return. Calculate the amount of the next annual dividend (i.e. D₁) if the dividends are increasing by 5 percent annually.