The risk-free rate of return is 7%, the expected rate of return on the market portfolio is 14%, and the stock of Xyrong Corporation has a beta coefficient of 1.2. Xyrong pays out 38% of its earnings in dividends, and the latest earnings announced were $10 per share. Dividends were just paid and are expected to be paid annually. You expect that Xyrong will earn an ROE of 22% per year on all reinvested earnings forever.

Required:

(a) What is the intrinsic value of a share of Xyrong stock? (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Intrinsic value $

(b) If the market price of a share is currently $103, and you expect the market price to be equal to the intrinsic value one year from now, what is your expected one-year holding-period return on Xyrong stock? (Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. Omit the "%" sign in your response.) Expected one-year holding-period return %