A company has just issued a dividend of $1.64 on earnings of $2.34. The analysts expect the dividends to grow at 5% forever. Investors observe a risk-free rate of 3%, stocks beta is 1.5 and the market risk premium us 6%.

1. The expected return that investors will require on this stock is:
   1. 9%
   2. 10%
   3. 12%
   4. 15%
2. The current value of this stock is:
   1. $21.6
   2. $24.6
   3. $28.6
   4. $31.6
3. This stock may be considered a:
   1. Value stock, since its dividend yield is 5% and capital gains yield is 7%
   2. Value stock, since its dividend yield is 7% and capital gains yield is 5%
   3. Growth stock, since its dividend yield is 5% and capital gains yield is 7%
   4. Growth stock, since its dividend yield is 7% and capital gains yield is 5%