1. (Common stock valuation) Schlumberger is selling for $ 66.34 per share and paid a dividend of $ 2.61 last year. The dividend is expected to grow at 2 percent indefinitely. What is the stock's expected rate of return? The stock's expected rate of return is %. (Round to two decimal places.)

2. (Common stock valuation) Herrera Motor Inc. paid a $3.25 dividend last year. At a constant growth rate of 3 percent, what is the value of the common stock if the investors require a rate of return of 22 percent? The value of the Herrera Motor common stock is $ (Round to the nearest cent.)