Here are data on two stocks, both of which have discount rates of 14%:

Stock A

Stock B

Return on equity

14

%

10

%

Earnings per share

$

1.50

$

1.40

Dividends per share

$

1.20

$

1.20

(The earnings per share and the dividends per share represent Year 0 values.)

a.

What are the dividend payout ratios for each firm?

b.

What are the expected dividend growth rates for each firm?

c.	What is the proper stock price for each firm?