Here are data on two stocks, both of which have discount rates of 15%:

Stock A Stock B

Return on equity 15 % 12 %

Earnings per share $ 3.50 $ 2.40

Dividends per share $ 0.70 $ 0.70 a.

What are the dividend payout ratios for each firm? (Enter your answers as a percent rounded to 2 decimal places.)

b. What are the expected dividend growth rates for each stock? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

c. What is the proper stock price for each firm? (Do not round intermediate calculations. Round your answers to 2 decimal places.)