Melissa Popp is thinking about buying some shares of R.H. Lawncare Equipment, at $ 50.59 per share. She expects the price of the stock to rise to $ 59.11 over the next 3 years. During that time she also expects to receive annual dividends of $ 5.93per share.

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

b. What is its expected return?