In each of the following situations, assume a zero-growth rate for earnings and dividends

(NPVGO is zero), that all earnings are paid out as dividends, and that the earnings-based valuation model in equation (6.9) is being used.

1. Dennison Corporation's earnings are expected to be $7 per share and its stock price is $28.

What is the required rate of return on the firm’s equity?

2. Sampson Corporation's earnings are expected to be $5 per share and its required rate of return on equity is 22%. What is the current price of the stock?

3. Johnson Corporation’ current stock price is $40 and its required rate of return on equity is 15%. What is the firm's expected earnings?