Microsoft (MSFT) stock on May 2013 traded for $33. Over the next 12-months MSFT is expected to pay a dividend of $0.25 each quarter. An equity analyst calculates the required return for MSFT as 7%.The analyst further provides a one-year price target for MSFT stock at $37.50

1. what is the analys's one-year expected return for MSFT? (Please show work)

2. What should the price target for MSFT be if you thought it was fairly valued? (Please show work)