Melissa Cutt is thinking about buying some shares of EZLawn Equipment, at $40.02per share. She expects the price of the stock to rise to $52.65 over the next 3 years. During that time she also expects to receive annual dividends of $4.19 per share.

a. What is the intrinsic worth of this stock, given a required rate of return of 9%?

b. What is its expected return?

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Part 1

a. The intrinsic worth of this stock is $?

(Round to the nearest cent.

b. What is its expected return?