The FI Corporations dividends per share are expected to grow indefinitely by 7% per year.

a. If this years year-end dividend is $10.00 and the market capitalization rate is 12% per year, what must the current stock price be according to the DDM?

Current stock price_______

b. If the expected earnings per share are $15.00, what is the implied value of the ROE on future investment opportunities? (Round your answer to 2 decimal places.)

Value of ROE________%

c. How much is the market paying per share for growth opportunities (i.e., for an ROE on future investments that exceeds the market capitalization rate)? (Round your answer to 2 decimal places.)

Amount _________ per share