Malfoy Corporation paid a $3.00 dividend per share this year. Its total earnings per share were

$6.00. Malfoys book equity is $60 million. There are 1 million shares outstanding and the

discount rate for Malfoy stock is 12%.

(a) What is the sustainable growth rate (g) of Malfoy?

(b) What is the price of a share of Malfoy stock if you assume that the numbers above are

representative of the foreseeable future?

(Please list out calculation step and formula, not excel , Thank you)