7. Suppose a firm is expected to increase dividends by 10% in one year and by 20% in two years. After that, dividends will be increase at a rate of 6% per year indefinitely. If the last dividend was $2 and the required return is 12%, what is the price of the stock? 8. Suppose a company had earnings per share of $12 over the past year. The industry average PE rate is 20. Use this information to value this company's stock price. 9. You observe a stock price of $18.75. You expect a dividend growth rate of 5%, and the most recent dividend was$1.40. What is the required return? 10. Suppose the real rate is 3.5 percent and the inflation rate is 4.5 percent. What rate would you expect of the nominal interest rate quoted at a Treasury Bill? 11. Say you own an asset that had a total return last year of 11.7 percent. If the inflation rate last year was 3.9 percent, what was your real return? 12. You bought a stock for $40, and you received dividend of $1. The stock is now selling at $50. i. What is your dollar return? ii. What is your dividend yield in percentage? What is your capital gains yield in percentage? What is your total percentage return