1. A stock just paid a dividend of $4.73 and is expected to maintain a constant dividend growth rate of 4.6 percent indefinitely. If the current stock price is $84, what is the required return on the stock?
2. Gnomes R Us just paid a dividend of $1.95 per share. The company has a dividend payout ratio of 55 percent. If the PE ratio is 17.4 times, what is the stock price?