The portion of earnings that is held at the firm to support future growth gives rise to

retained earnings.

common stocks.

common dividends.

Firm ABC just announced that its next annual dividend is expected to be $1.25 per share. The firm has a policy of increasing the dividend by 3 percent annually. What is the current value of this stock at a discount rate of 12 percent?

$13.89

$15.58

$12.99

Firm ABC has current earnings per share of $2.52 and an expected earnings growth rate of 2.8 percent. The required return on the stock is 11 percent and the current book value per share is $33.20. What is the current market value of this stock?

$22.58

$1.66

$20.26