P7 - 9:

Common stock valueConstant growth McCracken Roofing, Inc., common stock paid a dividend of $1.05 per share last year. The company expects earnings and dividends to grow at a rate of 4% per year for the foreseeable future.

a.What required rate of return for this stock would result in a price per share of $24?

b. If McCracken expects both earnings and dividends to grow at an annual rate of 12%, what required rate of return would result in a price per share of $24?

a. The required rate of return for this stock, in order to result in a price per share of $24,is nothing%.(Round to two decimal places.)