Problem 8-01 The Baron Basketball Company (BBC) earned $8 a share last year and paid a dividend of $7 a share. Next year, you expect BBC to earn $9 and continue its payout ratio. Assume that you expect to sell the stock for $125 a year from now. Do not round intermediate calculations. Round your answers to the nearest cent. a. If you require 10 percent on this stock, how much would you be willing to pay for it? $ b. If you expect a selling price of $112 and require a 9 percent return on this investment, how much would you pay for the BBC stock? The Shamrock Dogfood Company (SDC) has consistently paid out 45 percent of its earnings in dividends. The company's return on equity is 13 percent. Do not round intermediate calculations. Round your answers to two decimal places. a. What would you estimate as its dividend growth rate? % b. If you found out that the company was only growing at 6 percent, how much could the company afford to pay out? %