a) Hammond Pipes has issued a preferred stock that pays $12 per share. The dividend is fixed and the stock has no expiration date. What is the intrinsic or true value of Hammond preferred stock, assuming a discount rate of 15%?

b) Spring Valley Bedding stock currently sells for $53 per share. The stocks dividend is expected to grow at 6% per year indefinitely. Spring Valley just paid a dividend of $3 per share. Given this information, calculation the stocks internal rate of return.