1. Suppose that the consensus forecast of security analysts of your favorite company is that earnings next year will be $5.00 per share. The company plows back 50% of its earnings and if the Chief Financial Ofcer (CFO) estimates that the company's return on equity (ROE) is 16%. Assuming the plowback ratio and the ROE are expected to remain constant forever, answer the following questions. (a) If you believe that the the company's required rate of return is 10%, what is your estimate of the price of the company's stock? (b) Suppose you observe that the stock is selling for $50.00 per share, what would you conclude about either your belief of the stock's required rate of return or the CFO's estimate of the company's return on equity? (a qualitative answer is sufcient) (c) Suppose that you are confident that 10% is the required rate of return on the stock. What does the market price of $50.00 per share imply about the market's estimate of the company's expected return on equity? (please give a number)