Common stock value - Constant growthMcCracken Roofing, Inc., common stock paid a dividend of $1.23 per share last year. The company expects earnings and dividends to grow at a rate of 8% 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 12%, what required rate of return would result in a price per share of $20?