Jacobson, Inc. paid $3.00 in dividends to common stockholders last year. Dividends are expected to grow at sustainable growth rate for an indefinite number of years. Jacobson has a return on equity of 30% with dividend payout ratio of 60%.

1. If Jacobsons stock current market price is $33.60, what is the stocks expected rate of return?
2. If your required rate of return is 18 percent, what is the value of the stock for you?