1. Suppose that the consensus forecast of security analysts of your favorite company is that earnings next year will be E = $5.00 per share. Suppose that the company tends to plow back 50% of its earnings and pay the rest as dividends. If the Chief Financial Officer (CFO) estimates that the company's growth rate will be 8% from now onwards, answer the following questions. (a) If your estimate of the company's required rate of return on its stock is 10%, what is the equilibrium price of the stock? (b) Suppose you observe that the stock is selling for $50.00 per share, and that this is the best estimate of its equilibrium price. What would you conclude about cither (1) your estimate of the stock's required rate of return; or (u) the CFO's estimate of the company's future growth rate? (e) Suppose your own 10% estimate of the stock's required rate of return is shared by the rest of the market. What does the market price of $50,00 per share imply about the market's estimate of the company's growth rate