8-18A. (Common stock valuation) Wayne, Inc.'s outstanding common stock is currently selling in the market for $33. Dividends of $2.30 per share were paid last year, and the company expects annual growth of 5 percent.

a. What is the value of the stock to you, given a 15 percent required rate of return?

b. Determine the expected rate of return for the stock.

c. Should you purchase this stock?