1.) If Pepperdine, Inc.'s return on equity is 15% and the management plans to retain 56% of earnings for investment purposes, what will be the firm's growth rate?

2.) Header Motor, Inc., paid a $3.85 dividend last year. At a constant growth rate of 5%, what is the value of the common stock if the investors require a 11% rate of return?

3.) Given that a firm's return on equity is 24% and management plans to retain 36% of earnings for investment purposes, what will be the firm's growth rate? If the firm decides to increase its retention rate, what will happen to the value of its common stock?

4.) Wayne, Inc.'s outstanding common stock is currently selling in the market for $23. Dividends of $2.49 per share were paid last year, return on equity is 23%, and its retention rate is 29%.

a.What is the value of the stock to you, given a required rate of return of19%?

b.Should you purchase this stock?