Eureka Enterprises expects to maintain a 13 % return on equity (ROE) and an annual growth rate of residual income growth rate of 8 % per year into the future. The required rate of return on equity is 12 % and the book value per share of the stock is $25. Use the residual income model to:

a. Estimate the value of Eureka Enterprises stock.

b. Estimate the current price to book ratio of Eureka Enterprises stock.