1)An analyst is trying to the future growth rate of dividends for s company. She finds that return on assets was 6% last year, the equity multipli is 3, and that the retention ratio was 35%. Using the sustainable growth model. what should be her estimate of^ - g^ -1

A. 0.70\%

B. 2.10\%

C. 3.90\%

D. 6.30\%

E. 11.70\%

2).Suppose a firm is expected to increase dividends by 20% in one year and by 5\% in two years. After that, dividends will increase at a rate of 5% per year indefinitely. If the last dividend was $1 and the required return is 20%, what is the price of the stock?

A. $8,00

B. $8.45

C. $8.51

D. $8.60

E. $8.67