The XYZ company is expected to pay a dividend of $1.00 per share at the end of the year, and that dividend is expected to grow at a constant rate of 2.00% per year in the future. The company's beta is 1.2, the market risk premium is 5.0%, and the nominal risk-free rate is 2.00%.
1) What is the fundamental price of the stock?
2) What is the stock's expected return?