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Common stock value - Constant growth McCracken Roofing, Inc., common stock paid a dividend of $ 1 . 2 9 per share last year. The

Common stock value-Constant growth McCracken Roofing, Inc., common stock paid a dividend of $1.29 per share last year. The company expects earnings and dividends to grow at a rate of 7% per year for the foreseeable future.
a. What required rate of return for this stock would result in a price per share of $20?
b. If McCracken expects both earnings and dividends to grow at an annual rate of 11%, what required rate of return would result in a price per share of $20?
a. The required rate of return for this stock, in order to result in a price per share of $20, is 5.11%.(Round to two decimal places.)
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