Assume a compnay just finished paying an annual dividend of $3. You look up their beta and it equals 0.5. The current risk-free rate equals 2%. Assume a market return of 7%. Merck's current stock price is $100.

1) what is investors require rate of return on this investment? (in decimal format, not percentage)

2) Assume the company grows at a constant rate in perpetuity, what is the growth rate expecatation?