The last dividend Company X paid was $ 5 and the constant growth rate of dividends is 2%. The current price of this stock is $20 per share. What is the required rate of return (yield) on that stock?

		27.5%
		15%
		8%
		35%

1b.

A preferred stock is paying annual dividend of $5 forever. What is the price of this preferred stock if the yield (required rate of return on this preferred stock) is 10%?

		$ 2
		$ 20
		$ 5
		$ 50