Holly plc has book value of equity of $100$m$.$ Its return on equity is expected to

remain at $14\%$ in perpetuity, its cost of equity is $8\%,$ and its residual income is

expected to grow at $2\%$ per year in perpetuity.

a$.$ What is the value of equity of Holly plc$?(3$ marks$)$

b$.$ What is the expected payout ratio for the company?