The stock of Nogro Corporation is currently selling for $$17$ per share. Earnings per share in the coming year are expected to be $$2\mathrm{.}70.$

The company has a policy of paying out $25\%$ of its earnings each year in dividends. The rest is retained and invested in projects that

earn a $21\%$ rate of return per year. This situation is expected to continue indefinitely.

a$.$ Assuming the current market price of the stock reflects its intrinsic value as computed using the constant$-$growth DDM$,$ what rate of

return do Nogro's investors require? $($Do not round intermediate calculations. Round your answer to $2$ decimal places.$)$

Rate of return

b$.$ By how much does its value exceed what it would be if all earnings were paid as dividends and nothing were reinvested? $($Do not

round intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to $2$ decimal places.$)$

PVGO