Melissa Cutt is thinking about buying some shares of EZLawn Equipment, at

$48.74

per share. She expects the price of the stock to rise to

$51.76

over the next

3

years. During that time she also expects to receive annual dividends of

$6.84

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?