Consider the following information for Sharpie Corp. (Sharpie):

• The correlation coefficient between Sharpie's stock returns and those ofthe S&P/TSX Composite Index is 0.45
• The volatility of Sharpie's stockreturns is65%
• In its most recent year-end financial statements, Sharpie reported the following:

oRevenue of $14.75 mln

oNet Income of $5.50 mln

oTotal Assets of $126.75 mln

oTotal Liabilities of $58.00 mln

oRetained Earnings of $14.25mln compared with$10.40mln in the prior year

oShares Outstanding of 750,000oAverage Tax Rate of 22%

oMarginal Tax Rate of 28%

a. What is the growth rate associated with Sharpie's stock?

b. Assume that Sharpie's dividendshave been growing at a constant rate for a while now and will continue to do so in the future. What would be the company's market

capitalization?

c Assume that rather than growing at a constant rate, you estimate that dividends will grow as follows:

oBy 12% in the current year

oBy 9% in years 2 through 7

oBy the long-term sustainable growth rate found in part a from year 8

onwards

What is the market capitalization of Sharpie's equity now?