1.Assume the expected inflation rate is 3.6 percent. If the current real rate of interest is 6.8 percent, what should the nominal rate of interestbe?

2.If the StanfordCorporation's net income is $237 million, its common equity is $824 million, and management plans to retain 75 percent of thefirm's earnings to finance newinvestments, what will be thefirm's growthrate?

3.HeaderMotor, Inc., paid a $2.59 dividend last year. At a constant growth rate of 7 percent, what is the value of the common stock if the investors require a 12 percent rate ofreturn?