a) KPs stock has a beta of 1.20. The risk free rate is 3% and the expected market risk premium E(rm)-rf is 6%. What is the required rate of return on KP stock?

b) KP just paid a dividend (D0) of $2.00. Dividends are expected to grow at 17% per year for the next 4 years, after which they will grow at 3% forever. What is KPs current stock price per share? Note that the required return on the stock was computed in part a.

c) KP has 2,500,000 shares of stock outstanding. What is the total market value of KPs common stock?