A firm with return on equity 20% and beta 0.9 just distributed all its earnings ($12 per share) as dividends. The expected market return is 15% and the risk-free rate is 5%. The firm can keep distributing all its earnings to shareholders each year or retain 25% for reinvestment.

What is the price of the stock, if all earnings are distributed as dividends moving forward?

What is the price of the stock if the firm decides to retain 25% of its earnings each year moving forward?