1)Rate of Return. Steady As She Goes, Inc., will pay a year-end dividend of $3 per share. Investors expect the dividend to grow at a rate of 4 percent indefinitely.

a. If the stock currently sells for $30 per share, what is the expected rate of return on thestock?

b. If the expected rate of return on the stock is 16.5 percent, what is the stock price?

1)You expect a share of stock to pay dividends of $1.00, $1.25, and $1.50 in each of the next 3 years. You believe the stock will sell for $20 at the end of the third year.

a. What is the stock price if the discount rate for the stock is 10 percent?

b. What is the dividend yield?