Ahmed Company is currently selling for $46, paying $2.80 in dividends, and investors expect dividends to grow at a constant rate of 13 percent a year.

a. If an investor requires a rate of return of 19 percent for a stock with the riskiness of Ahmed Company, is it a good buy for this investor?

b. What is the maximum an investor with a 19 percent and 21% required return should pay for Ahmed Company? What is the maximum if the required.