Exe.Stocks.4.2

Question 6 - 225
Steady As She Goes, Inc., will pay a year-end dividend of $3 per share. Investors expect the dividend to grow at a rate of 4% indefinitely.
a. If the stock currently sells for $30 per share, what is the expected rate of return on the stock?
b. If the expected rate of return on the stock is 16.5%, what is the stock price?