1. A stock is expected to pay a dividend of $1.6 at the end of the year. The required rate of return is rs = 12.5%, and the expected constant growth rate is g = 6.9%. What is the stock's current price?
2. The common stock of ABC Industries is valued at $46.7 a share. The company increases their dividend by 7.7 percent annually and expects their next dividend to be $1.1. What is the required rate of return on this stock? That is, solve for r.