1. Why does the value of a stock depend on dividends? A substantial percentage of the companies listed on the NYSE and NASDAQ dont pay dividends, but investors are nonetheless willing to buy shares in them. How is this possible?

2. What is the value of an infinite series of $50 semiannual payments growing at a rate of 4% every six months and with a discount rate of 10% APR compounded semiannually? How would your answer change if the growth rate was 5% every six months?