7. ( 20 points) The stock of Nogro Corporation is currently selling for \\( \\$ 10 \\) per share. Earnings per share in the coming year are expected to be \\( \\$ 2 \\). The company has a policy of paying out \50 of its earnings each year in dividends. The rest is retained and invested in projects that earn a \20 rate of return per year. This situation is expected to continue indefinitely. - Assuming the current market price of the stock reflects its intrinsic value as computed using the constant-growth DDM, what rate of return do Nogro's investors require? - By how much does its value exceed what it would be if all earnings were paid as dividends and nothing were reinvested? Calculate the PVGO