1. Bates Co. is expected to pay a dividend of $1.25/common share next year. The dividend growth rate is 2%. Find the required rate of return if the stock sells for $80.

2. BAC Industries' common stock sells for $35/share. The company is expected to pay a dividend of $2/share and investors require a 10% required rate of return. Find the growth rate in dividends. (Round intermediate steps and your final answer to four decimals and enter your answer in decimal format. ex: .XXXX)

3. Smith Inc. paid a $3 dividend last year, which will grow at a constant 6% rate indefinitely. Find the required rate of return if the stock sells for $47.