Common stock valueVariable growth Lawrence Industries' most recent annual dividend was $1.17 per share (D = $1.17), and the firm's required return is 14%. Find the market value of Lawrence's shares when dividends are expected to grow at 20% annually for 3 years, followed by a 3% constant annual growth rate in years 4 to infinity Rate of return Douglas Keel, a financial analyst for Orange Industries, wishes to estimate the rate of return for two similar-risk investments, X and Y. Douglas's research indicates that the immediate past returns will serve as reasonable estimates of future returns. A year earlier, investment X had a market value of $18,000; and investment Y had a market value of $70,000. During the year, investment X generated cash flow of $1,350 and investment Y generated cash flow of $7,957. The current market values of investments X and Y are $18,467 and $70,000, respectively. a. Calculate the expected rate of return on investments X and Y using the most recent year's data. b. Assuming that the two investments are equally risky, which one should Douglas recommend? Why