BKE manufactures carbon capture modules. The firm does not currently pay a dividend and uses all company profits to expand a company-owned lithium mine. Analysts expect BKE to pay a dividend of $1.25 four years from today. Dividends will then grow by 15% annually for 3 years and then decline by 7.5% (from 15% to 7.5%) for 2nd three-year growth window. The growth rate will then decline to a constant 5% per year forever. BKE equity has a required return of 8%.

a. Calculate P0 for BKE equity.

b. BKE is currently trading for $60 per share. If the initial dividend and dividend growth assumptions are correct, determine the implied BKE required return for a 60% price per share.