1. Paychex Inc. (PAYX) recently paid an $0.82 dividend. The dividend is expected to grow at a 15 percent rate. The current stock price is $60.51.
What is the return shareholders are expecting? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
2. A firm does not pay a dividend. It is expected to pay its first dividend of $0.75 per share in two years. This dividend will grow at 14 percent indefinitely. Use a 15.5 percent discount rate.
Compute the value of this stock. (Round your answer to 2 decimal places.)