1. (Common stockholder expected return?) Bennett, Inc. common stock currently sells for $22.50 per share. The? company's executives anticipate a constant growth rate of 10.2 percent and an? end-of-year dividend of $2.75.

a. What is your expected rate of return if you buy the stock for $22.50??

b. If you require a return of 16 percent, should you purchase the? stock?

a. If you buy the stock for $22.50?, your expected rate of return is ?%. (Round to two decimal? places.)

b. If you require a return of 16 percent, the value of the stock for you is $?(Round to the nearest? cent.)

?2. (Preferred stockholder expected return?)You own 100 shares of Budd Corporation preferred stock at a market price of $ 18 per share. Budd pays dividends of $2.00. What is your expected rate of? return? If you have a required rate of return of 13 percent, should you sell your shares or buy more of the? stock?

a. Your expected rate of return is ?%. (Round to two decimal? places.)

b. If you have a required rate of return of 13 percent, the value of the stock for you is $?(Round to the nearest? cent.)