Alyward & Bram common stock currently sells for $ 22.25 per share. The company's executives anticipate a constant growth rate of 11.9 percent and an end-of-year dividend of $1.25.

a. What is your expected rate of return?

b. If you require a return of 16 percent, should you purchase the stock?

If you require a return of 16 percent, you should buy or sell? the stock because the expected rate of return is Greater than or Less than? your required rate of return or the intrinsic value of the stock is Greater than or Less than? the current market price.