Steady As She Goes, Inc., will pay a year-end dividend of $3.70 per share. Investors expect the dividend to grow at a rate of 5% indefinitely.
a. If the stock currently sells for $37 per share, what is the expected rate of return on the stock? (Do not round intermediate calculations.)
Expected rate of return %
b. If the expected rate of return on the stock is 17.5%, what is the stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Stock price $