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Melissa Cutt is thinking about buying some shares of EZLawn Equipment, at $41.66 per share. She expects the price of the stock to rise to

Melissa Cutt is thinking about buying some shares of EZLawn Equipment, at $41.66 per share. She expects the price of the stock to rise to $49.82 over the next 3 years. During that time she also expects to receive annual dividends of $6.66 per share.

a. What is the intrinsic worth of this stock, given a required rate of return of 12%?

b. What is its expected return?

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