What is the price of the stock with growth

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A) Fortress of Solitude Co. expects an earnings per share of $1.47 and reinvests 35% of its earnings. Management projects a rate of return of 11% on new projects and investors expect a 10% rate of return on the stock. Given a sustainable growth rate of 3.85%, what is the price of the stock with growth? Enter your response below rounded to 2 DECIMAL PLACES.

B) Consider a stock that will have dividends in the next three periods of $1.10, $1.21, and $1.25, respectively. The interest rate is 8%. If the growth rate is expected to be 3.31% indefinitely, what is the price of the stock in period 2? Enter your response below rounded to 2 DECIMAL PLACES.

Reference no: EM133123808

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