1.) Melissa Popp is thinking about buying some shares of R.H. Lawncare Equipment, at $48 per share. She expects the price of the stock to rise to $60 over the next three years. During that time she also expects to receive annual dividends of $4 per share. What is the intrinsic worth of this stock, given a 12% required rate of return? What is its expected return?

2.) Investors expect that Amalgamated Aircraft Parts, Inc., will pay a dividend of $2.50 in the coming year. Investors require a 12% rate of return on the companys shares, and they expect dividends to grow at 7% per year. Using the dividend valuation model, find the intrinsic value of the companys common shares.