Q1. Linsworth investment is offering securities that will promise to pay investors a quarterly distribution of $0.10 and is expected to grow at 0.5% per quarter. The first distribution is in 3 months time. Calculate the fair value of this security if the market prices it at 10% p.a. Give your answer correct to the nearest cent.

Q2. Everlast corporation is expecting to pay $0.66 in dividend at the end of the year. The Company pay half yearly dividends and they do not expect the dividend to increase. Today the company stock price is $11. Calculate the effective annual return on equity implied by the price, giving your answer in a % correct to the nearest cent.