1.

2.

Storico Co. just paid a dividend of $1.50 per share. The company will increase its dividend by 20 percent next year and will then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent dividend growth, after which the company will keep a constant growth rate forever. If the required return on the company's stock is 15 percent, what will a share of stock sell for today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) The Rose Co. has earnings of $2.00 per share. The benchmark PE for the company is 13. What stock price would you consider appropriate? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) What if the benchmark PE were 16? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)