B. Stock XYZ declares a dividend of $2 per share and is currently valued at $125 in the market. Based on the stock's dividend history, a broker determines a dividend growth rate for the stock of 5% per year and a discount rate of 7%.

1. Calculate the stock current value (3 marks)
2. What would be your recommendation to investors holding this stock (2 marks)

C. Sea Gardens is a resort company with average risk. The industry average Price-earnings ratio (P/E) for resort companies is 13. If Sea Gardens has earnings per share (EPS) of $1.70, what would be a fair price for its shares? (5 marks)