The Baron Basketball Company $(BBC)$ earned $$11$ a share last year and paid a dividend of $$5$ a share. Next year, you expect $BBC$ to earn

$$12$ and continue its payout ratio. Assume that you expect to sell the stock for $$126$ a year from now. Do not round intermediate

calculations. Round your answers to the nearest cent.

a$.$ If you require $11$ percent on this stock, how much would you be willing to pay for it$?$

$

b$.$ If you expect a selling price of $$113$ and require a $7$ percent return on this investment, how much would you pay for the BBC

stock?

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