Bakers Inn is a mature company that has experienced modest success over the last few years. Over the last few years, the companys earnings have grown at a modest rate of 3.5%. It is expected that the company will be able to sustain this growth rate in the future. The company expects to pay a dividend of $3.68 this year. If investors in the past have required an 11.5 percent rate of return on the companys stock,

1. Calculate the expected value of the share in the market today?
2. You observe that the current market price for the company shares is $43.35. Calculate the expected return that investors are expecting now.