1.You expect KT Industries (KTI) will have earnings per share of $4 and expect that they will pay out $ 1.50 of these earnings to shareholders in the form of a dividend. KTI's return on new investment is 15% and their equity cost of capital is 12%. The expected growth rate for KTI's dividends is :

2.Suppose the risk- free return is 3.5% and the market portfolio has an expected return of 12%, and a volatility of 15.6%. Merck & Co. stock has a 20.7% volatility and a correlation with the market of 0.4 . Under the CAPM assumptions, Merck & Co. stock's expected return is _____% ?